Economics, Econometrics and Finance
8 years ago

Leniency programs disrupt cartels and prevent new ones from forming.

ZEW economic studies
Leniency Programmes and the Structure of Cartels – Remarks from an Economic Perspective
Kai Hüschelrath, Heike Schweitzer

Paper Summary

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Leniency programs are a new way to stop cartels from forming. They work alongside fines and sometimes criminal charges. These programs started in the US in 1978 and in Europe in 1996. They have become a big source of information on cartels, with most cases coming from witnesses. Leniency programs are good at stopping new cartels from starting, not just breaking up existing ones.