Leniency Programs and the Design of Antitrust: Experimental Evidence with Free-Form Communication

Peter T. Dijkstra*, Marco A. Haan, Lambert Schoonbeek

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

1 Citation (Scopus)

Abstract

We present experimental evidence on the effectiveness of corporate leniency programs. Different from other leniency experiments, ours allows subjects to have free-form communication. We do not find much of an effect of leniency programs. Leniency does not deter cartels. It only delays them. Free-form communication allows subjects to build trust and resolve conflicts. Reporting and defection rates are low, especially when compared to experiments with restricted communication. Indeed, communication is so effective that, with leniency in place, prices are not affected if cartels are fined and cease to exist.

Original languageEnglish
Number of pages24
JournalReview of Industrial Organization
DOIs
Publication statusPublished - 27-Oct-2020

Keywords

  • Antitrust
  • Cartels
  • Experiment
  • Leniency program
  • PRICE ANNOUNCEMENTS
  • CARTEL FORMATION
  • COLLUSION
  • CONSPIRACIES
  • INFORMATION
  • AGREEMENT
  • RESTRAINT
  • POLICIES

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