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Cartel Leniency and Settlements: A Joint Perspective

Version 3 2023-11-15, 17:13
Version 2 2023-08-03, 07:17
Version 1 2023-01-06, 16:27
journal contribution
posted on 2023-08-03, 07:17 authored by Peter Dijkstra, Jacob Seifert

This  paper  studies  the  interactions  between  a  cartel  leniency  program  anda  settlement  procedure.   The  EU  settlement  procedure  gives  colluding  firmsthat do not apply for leniency an additional opportunity to cooperate with thecompetition authority in exchange for a reduced fine once a preliminary case hasbeen established against them.  We derive the conditions under which colludingfirms  apply  for  leniency,  settle,  or  refuse  to  cooperate  with  the  authority  inequilibrium.  Our policy results show that settlements can act as a complementor  a  substitute  to  the  leniency  program.   We  also  study  the  welfare-optimalpolicy and highlight a novel interdependence between the fine reductions thatshould be offered to leniency applicants and settling firms.

History

Author affiliation

School of Business, University of Leicester

Version

  • AM (Accepted Manuscript)

Published in

Review of Industrial Organization

Publisher

Springer

issn

0889-938X

Copyright date

2023

Publisher DOI

Language

en

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