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Article
An economic analysis of leniency programs in antitrust law
De Economist (2003)
  • Jeroen Hinloopen
Abstract
Within a dynamic market environment the forces that drive the effectiveness of leniency programs in antitrust law are analyzed. This effectiveness unambigously is enhanced by (i) increasing the reduction in fine payments in return for reporting a cartel, and (ii) increasing the expected per-period cartel detection probability for any (future) period. Increasing fine payments for violating antitrust law also enhances the programs' effectiveness provided that the reduction in fine payment in return for reporting is large enough. The effectiveness of leniency programs is not influenced by the length of the period of limitation that comes with violating antitrust laws.
Keywords
  • cartel stability,
  • leniency program,
  • time-dependent detection probabilities
Publication Date
December, 2003
Citation Information
Jeroen Hinloopen. "An economic analysis of leniency programs in antitrust law" De Economist Vol. 151 Iss. 4 (2003) p. 415 - 432
Available at: http://works.bepress.com/hinloopen/24/