DP2349 Leniency Programs and Cartel Prosecution

Author(s): Massimo Motta, Michele Polo
Publication Date: January 2000
Keyword(s): Amnesties, Antitrust, Cartels, Collusion, Optimal Deterrence
JEL(s): D21, K20, L40
Programme Areas: Industrial Organization
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=2349

We study the enforcement of competition policy against collusion under Leniency Programs, which give reduced fines to firms revealing information to the Antitrust Authority. Such programs give firms an incentive to break collusion, but may also have a pro-collusive effect, since they decrease the expected cost of misbehaviour. We analyze the optimal policy under alternative rules, obtaining a ranking of the different schemes and showing when the use of reduced fines may improve antitrust enforcement.