On the Optimal Design of Leniency Programmes

Agisilaou, Panayiotis (2013) On the Optimal Design of Leniency Programmes. Doctoral thesis, University of East Anglia.

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    This thesis comprises of a collection of essays that aim at enhancing our under-
    standing of the underlying mechanics of leniency policies in antitrust.
    In Chapter 1, we provide a systematic overview of the most in�uential contribu-
    tions to the literature on collusion and leniency policies, with a focus on antitrust
    law. The survey elucidates the e¤ects of leniency programmes on cartel formation
    and cartel implementation.
    In Chapter 2, we provide a model to investigate the impact of a leniency pro-
    gramme on collusive �rms�incentives to keep or destroy hard incriminating evi-
    dence. We show that �rms may willfully keep the hard evidence to facilitate the
    implementation of the cartel. Firms are more inclined to keep the hard evidence
    when a leniency programme is available. Finally, �rms are more likely to destroy
    the hard evidence when the collusive pro�ts-�ne ratio increases.
    In Chapter 3, we study the strategic interaction between a cartel and an an-
    titrust authority whose evidence against the cartel is private information. Within
    the framework of a signalling game, we explore the antitrust authority�s incentives
    to reveal the strength of its evidence, before committing to its prosecutorial e¤ort.
    We show that, despite its potentially feeble evidence, the antitrust authority
    can exploit its informational lead and induce the cartel to self-report at an earlier
    stage of the prosecutorial process. The more generous the leniency programme,
    the easier it is to induce self-reporting by the cartel.
    In Chapter 4, we provide a model to characterize the optimal leniency pro-
    gramme when colluding �rms can invest resources to avoid detection. We show
    that the optimal �ne discount rate depends positively on the severity of the �ne
    and negatively on the probability of investigation and the cost of avoidance ac-
    tivities. A leniency programme that ignores �rms�e¤orts to avoid detection may
    result in under-deterrence.

    Item Type: Thesis (Doctoral)
    Faculty \ School: Faculty of Social Sciences > School of Economics
    Depositing User: Mia Reeves
    Date Deposited: 05 Mar 2014 13:06
    Last Modified: 05 Mar 2014 13:06
    URI: https://ueaeprints.uea.ac.uk/id/eprint/47933

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