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Cartel Leniency and Settlements: A Joint Perspective

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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 2023-11-15, 17:13 authored by Peter Dijkstra, Jacob Seifert

This paper studies the interactions between a cartel leniency program and a settlement procedure. The EU settlement procedure gives colluding firms that do not apply for leniency an additional opportunity to cooperate with the competition authority in exchange for a reduced fine after a preliminary case has been established against them. We derive the conditions under which colluding firms apply for leniency, settle, or refuse to cooperate with the authority in equilibrium. Our policy results show that settlements can act as a complement or as a substitute to the leniency program. We also study the welfare-optimal policy and highlight a novel interdependence between the fine reductions that should be offered to leniency applicants and to settling firms.

History

Author affiliation

School of Business, University of Leicester

Version

  • VoR (Version of Record)

Published in

Review of Industrial Organization

Volume

63

Pagination

239-273

Publisher

Springer

issn

0889-938X

Copyright date

2023

Available date

2023-11-15

Language

en

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