Predicting Cartel Formation

2016 ◽  
Author(s):  
Daniel Herold ◽  
Johannes Paha
Keyword(s):  
Cartel Formation

scholarly journals A dynamic approach to cartel formation

2008 ◽  
Vol 37 (3) ◽  
pp. 397-408 ◽  
Author(s):  
J. Kuipers ◽  
N. Olaizola
Keyword(s):  
Dynamic Approach ◽  
Cartel Formation

scholarly journals A study of the regulative acts’ leniency clause effect on the behavior of the firms

2017 ◽  
Vol 6 (4) ◽  
pp. 61-68
Author(s):  
Harshil Kaur
Keyword(s):  
Adverse Effect ◽  
Experimental Design ◽  
Market Share ◽  
The Self ◽  
Self Report ◽  
Side Payments ◽  
Cartel Formation

This paper experimentally investigates the effect of leniency clause on cartel formation and self-reporting by firms in an asymmetric cartel. The notion of asymmetric is used in terms of different market share of the firms, which form a cartel. This setting is used to bring the experimental design closer to reality. We experimentally controlled for ‘Provision of Deal’- when a firm with larger market share can offer some side payments to the firms with smaller market share and induce them not to report. We run three treatments: 1) Leniency without Deal (LWOD), 2) Leniency with Deal (LWD) and 3) Reward with Deal (RWD). In LWOD treatment players can come forward and self-report their communication to the authority. In LWD treatment before self-reporting there is another step where big players can transfer 10 points to the small player and induce them not to report. In RWD treatment players earn 25 points if they report, unlike LWD or LWOD where they paid some amount after reporting as well. The results of the experiment demonstrate that there is no notable difference in the formation of cartels among the three treatments. However, cartel members see the adverse effect of the provision of a deal on the self-reporting of cartels. The incidence of reporting falls significantly from 61.48% in Leniency without Deal treatment to 25.86% in Leniency with Deal treatment. Further, giving positive rewards to the self-reporters counteract the effect of the deal to a large extent. Thus, reporting is remarkably high at 41.44% in Reward with Deal treatment as compared to 25.86% in Leniency with Deal treatment. To sum up, the experiment accentuates the waning effect of leniency clause in an asymmetrical cartel.

The Economics of Antitrust Sanctioning

2018 ◽  
Author(s):  
Yannis Katsoulacos ◽  
Eleni Metsiou
Keyword(s):  
Economic Theory ◽  
Developing Countries ◽  
Empirical Evidence ◽  
Antitrust Enforcement ◽  
Cartel Formation

In this chapter, we first discuss the empirical evidence on cartel formation that is particularly worrying in recent years for the case of BRICS and developing countries and the traditional economic theory on deterrence as applied to sanctioning policies. We evaluate the available empirical evidence and discuss the reasons why cartels are still very active, despite the significant increase in the fines imposed, the application of leniency programmes, and the tougher antitrust enforcement. We point out three reasons why current sanctioning methods are not as effective as they could be, specifically currently: (1) penalties are misdirected to corporations and not to responsible individuals; (2) penalties on corporations are inefficiently designed by using wrong penalty bases; and (3) there is no exploitation of complementary policies, specifically for policies preventing recidivism in cartel formation. We conclude by pointing to a number of proposals for enhancing the effectiveness of sanctioning regimes.

Endogenous Cartel Formation

1998 ◽  
Vol 37 (1) ◽  
pp. 1-13 ◽  
Author(s):  
Curtis Eaton ◽  
Mukesh Eswaran
Keyword(s):  
Cartel Formation

Leniency and Damage Liability for Cartel Members in Brazil

2021 ◽  
Author(s):  
Lucas Campio Pinha ◽  
Marcelo José Braga
Keyword(s):  
Optimal Policy ◽  
Jel Codes ◽  
The Public ◽  
Criminal Sanctions ◽  
Ex Post ◽  
Recent Debate ◽  
Damage Claims ◽  
Leniency Program ◽  
Cartel Formation ◽  
Damage Claim

Abstract A recent debate on leniency policies is the interplay between the public and the private competition law enforcement. The lack of a well-established set of rules regarding damage claims may be harming the effectiveness of the Brazilian Leniency Program, either by discouraging the wrongdoers from applying for leniency in already formed cartels or by not being threatening enough to deter the cartel formation. The paper objective is to analyze the best policies for leniency applicants regarding the damage liability in Brazil. We conclude that the optimal policy is providing immunity to the leniency applicant, and after that the damage claim lawsuits can be encouraged with no undesirable effects. Extensions confirm the following: the immunity is even more effective when there is risk of betrayal; the immunity is the best policy in the case of ex-post leniency; the immunity is the optimal policy when there is no bankruptcy, otherwise the applicant liability should be the minimum necessary to avoid the bankruptcy; immunity regarding criminal sanctions for individuals is the optimal policy; for international cartels, the optimal policy is a combination of immunity regarding damage claims in all jurisdictions. JEL codes: L13; L41; L44

A GRAPH THEORETIC MODEL OF CARTEL FORMATION AND STRUCTURE

1978 ◽  
Vol 30 (2) ◽  
pp. 190-198 ◽  
Author(s):  
John N. Hoefer ◽  
David W. Bange
Keyword(s):  
Theoretic Model ◽  
Graph Theoretic ◽  
Cartel Formation
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