The Effects of Leniency Programs and Fines on Cartel Stability

13 Pages Posted: 2 May 2007

See all articles by Ankur Chavda

Ankur Chavda

HEC Paris - Strategy & Business Policy

Marc Jegers

Free University of Brussels (VUB) - Micro-Economics for Profit and Non Profit Sector (MICE)

Abstract

Using a stylized oligopoly model, we analyze the effect of cartel deterring fines, taking into consideration exemptions granted to cartel members cooperating with the competition authorities. We conclude that the fines can act as a deterrent to breaking collusive agreements, thus stabilizing the cartel.

Suggested Citation

Chavda, Ankur and Jegers, Marc, The Effects of Leniency Programs and Fines on Cartel Stability. Metroeconomica, Vol. 58, No. 2, pp. 231-243, May 2007, Available at SSRN: https://ssrn.com/abstract=981594 or http://dx.doi.org/10.1111/j.1467-999X.2007.00266.x

Ankur Chavda (Contact Author)

HEC Paris - Strategy & Business Policy ( email )

Jouy-en-Josas Cedex, 78351
France

Marc Jegers

Free University of Brussels (VUB) - Micro-Economics for Profit and Non Profit Sector (MICE) ( email )

Brussels
Belgium
+32-2-629 21 13 (Phone)
+32-2-629 22 82 (Fax)

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