Leniency Policies and Cartel Success: An Experiment

Jeong Yeol Kim, Charles N. Noussair

Research output: Contribution to journalArticlepeer-review

Abstract

Cartels are often fought by granting leniency, in the form of forgiveness of penalties, to whistle-blowers. This study employs a laboratory experiment to compare leniency programs that differ with respect to fine size and whether a second whistle-blower may apply for leniency. The results show that leniency does not affect the probability that a cartel forms, but is effective in exposing cartels and thereby inhibiting cartel success. Higher fines are more effective, but allowing leniency to a second whistle-blower is no more effective than granting leniency to only one whistle-blower.

Original languageEnglish (US)
Pages (from-to)187-210
Number of pages24
JournalReview of Industrial Organization
Volume63
Issue number2
DOIs
StatePublished - Sep 2023

Keywords

  • Antitrust
  • Cartel
  • Experiment
  • Leniency policy

ASJC Scopus subject areas

  • Economics and Econometrics
  • Strategy and Management
  • Organizational Behavior and Human Resource Management
  • Management of Technology and Innovation

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