he Impact of the Corporate Leniency Program on Cartel Formation and the Cartel Price Path
Previous research exploring the effect of corporate leniency programs has modelled the oligopoly stage game as a Prisoners?Dilemma. Using numerical analysis, we consider the Bertrand price game and allow the probability of detection and penalties to be sensitive to firms?prices. Consistent with earlier results, a maximal leniency program necessarily makes collusion more difficult. However, we also find that partial leniency programs - such as in the U.S. - can make collusion easier compared to offering no leniency. We also show that even if cartel formation is not deterred, a leniency program can reduce the prices charged by firms.
Year of publication: |
2005-04
|
---|---|
Authors: | Joseph E. Harrington, Jr ; Chen, Joe |
Institutions: | Department of Economics, Johns Hopkins University |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Ruebeck, Christopher S., (1997)
-
Modelling the Birth and Death of Cartels with an Application to Evaluating Antitrust Policy
Joseph E. Harrington, Jr, (2006)
-
Innovators, Imitators, and the Evolving Architecture of Social Networks
Joseph E. Harrington, Jr, (2005)
- More ...