Discussion Paper Details

Please find the details for DP4840 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Divide et Impera: Optimal Leniency Programmes

Author(s): Giancarlo Spagnolo

Publication Date: December 2004

Keyword(s): amnesty, antitrust, cartels, collusion, competition policy, corruption, immunity, law enforcement, leniency, oligopoly, organized crime, repeated games, risky cooperation and whistleblowers

Programme Area(s): Industrial Organization

Abstract: Leniency programmes (or policies) reduce sanctions against cartel members that self-report to the Antitrust Authority. We focus on their ability to directly deter cartels and analogous criminal organizations by undermining internal trust, increasing individual incentives to ?cheat? on partners. Optimally designed ?courageous? leniency programmes reward the first party that reports sufficient information with the fines paid by all other parties, and with finitely high fines achieve the first best. ?Moderate? leniency programmes that only reduce or cancel sanctions, as implemented in reality, may also destabilize and deter cartels by (a) protecting agents that defect (and report) from fines; (b) protecting them from other agents? punishment; and (c) increasing the riskiness of taking part to a cartel.

For full details and related downloads, please visit:

Bibliographic Reference

Spagnolo, G. 2004. 'Divide et Impera: Optimal Leniency Programmes'. London, Centre for Economic Policy Research.