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Leniency Programs for Multimarket Firms : The Effect of Amnesty Plus on Cartel Formation

Catherine Roux & Yassine Lefouili

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version abrégée We examine the effect of Amnesty Plus on dynamic cartel formation in a multimarket setting. The Amnesty Plus program has been adopted as part of the US Corporate Leniency Policy in 1999 and is now vigorously advertised as one of the most compelling tools in generating successful cartel investigations. Amnesty Plus is aimed at attracting amnesty applications by encouraging firms, convicted in one market, to report their collusive agreements in other markets. We show that Amnesty Plus has two opposite effects on firms' ability and incentives to collude which are both increasing in the fine reduction granted. First, Amnesty Plus can reduce the deterrence of cartel activities by making it easier for firms to sustain multimarket collusion through strategies involving self-reporting after a first cartel detection. Second, it can reduce the expected duration of cartels or delay their formation by increasing firms' incentives to self-report after a first cartel detection.


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Genre Journal paper
   
mot-clé Collusion; Amnesty Plus; Multimarket contact; Leniency program
   
langue English
kind of paper journal article
date de sortie de la publication 11-2012
journal International Journal of Industrial Organization
maison d'édition Elsevier (Amsterdam)
ISSN 0167-7187
ISSN (online) 1873-7986
DOI 10.1016/j.ijindorg.2012.04.004
émission du journal 30
numéro du journal 06/2012
page(s) 624-640
Review pas de Review
   
citation Roux, C., & Lefouili, Y. . (2012). Leniency Programs for Multimarket Firms: The Effect of Amnesty Plus on Cartel Formation. International Journal of Industrial Organization, 30(06/2012), 624-640, DOI:10.1016/j.ijindorg.2012.04.004.