The leniency rule revisited
- The experimental literature on antitrust enforcement provides robust evidence that communication plays an important role for the formation and stability of cartels. We extend these studies through a design that distinguishes between innocuous communication and communication about a cartel, sanctioning only the latter. To this aim, we introduce a participant in the role of the competition authority, who is properly incentivized to judge the communication content and price setting behavior of the firms. Using this novel design, we revisit the question whether a leniency rule successfully destabilizes cartels. In contrast to existing experimental studies, we find that a leniency rule does not affect cartelization. We discuss potential explanations for this contrasting result.
| Author details: | Maximilian AndresORCiDGND, Lisa BruttelORCiDGND, Jana Friedrichsen |
|---|---|
| DOI: | https://doi.org/10.1016/j.ijindorg.2021.102728 |
| ISSN: | 0167-7187 |
| Title of parent work (English): | International journal of industrial organization |
| Subtitle (English): | experiments on cartel formation with open communication |
| Publisher: | Elsevier |
| Place of publishing: | Amsterdam |
| Publication type: | Article |
| Language: | English |
| Date of first publication: | 2021/03/04 |
| Publication year: | 2021 |
| Release date: | 2024/04/15 |
| Tag: | cartel; corporate leniency program; experiment; judgment of communication; price competition |
| Volume: | 76 |
| Article number: | 102728 |
| Organizational units: | Wirtschafts- und Sozialwissenschaftliche Fakultät / Wirtschaftswissenschaften / Fachgruppe Volkswirtschaftslehre |
| DDC classification: | 6 Technik, Medizin, angewandte Wissenschaften / 65 Management, Öffentlichkeitsarbeit / 650 Management und unterstützende Tätigkeiten |
| Peer review: | Referiert |
