Portal de Periódicos da CAPES

Cartels and Leniency: Taking Stock of What We Learnt

2016; RELX Group (Netherlands); Linguagem: Inglês

10.2139/ssrn.2850498

1556-5068

Giancarlo Spagnolo, Catarina M. P. Marvão,

Politics, Economics, and Education Policy

Cartels remain widespread and constitute a major problem for society. Leniency policies reduce or cancel the sanctions for the first firm(s) that self-report being part of a cartel and have become the main enforcement instrument used by competition authorities around the world in their fight against cartels. Such policies have shown to be a powerful tool in inducing firms to self-report or cooperate with a cartel investigation in exchange for a reduction in sanctions. Since they reduce sanctions for successful leniency applicants, these programs may also be abused to generate many successful convictions for the competition authority at the expense of reduced cartel deterrence and social welfare. Hence, it is vital for competition authorities and society to understand how leniency programs affect firms' incentives, in order to optimize their design and administration. A rich theoretical, empirical and experimental economic literature developed in the last two decades to meet the challenge.