2012

Fines, Leniency, and Rewards in Antitrust

Reprint No. 2012:24

Author(s): Maria Bigoni, Sven-Olof Fridolfsson, Chloé Le Coq and Giancarlo SpagnoloYear: 2012 Title: RAND Journal of Economics Volume (No.): 43 (2) Pages: 368–390
Online article (restrictions may apply)
Preliminary version


This article reports results from an experiment studying how FINES, LENIENCY, and REWARDS for whistleblowers affect cartel formation and prices. Antitrust without LENIENCY reduces cartel formation but increases cartel prices: subjects use costly FINES as punishments. LENIENCY improves antitrust by strengthening deterrence but stabilizes surviving cartels: subjects appear to anticipate the lower postconviction prices after reports/LENIENCY. With REWARDS, prices fall at the competitive level. Overall, our results suggest a strong cartel deterrence potential for well-run LENIENCY and REWARD schemes. These findings may also be relevant for similar white-collar organized crimes, such as corruption and fraud.


Reference:
Bigoni, Maria, Sven-Olof Fridolfsson, Chloé Le Coq and Giancarlo Spagnolo (2012), "Fines, Leniency, and Rewards in Antitrust". RAND Journal of Economics 43(2), 368–390.

Interdisciplinary European Studies

The European Union in a Changing World Order

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This book explores how the European Union responds to the ongoing challenges to the liberal international order. These challenges arise both within the EU itself and beyond its borders, and put into question the values of free trade and liberal democracy. 

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