Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/94002 
Authors: 
Year of Publication: 
2011
Series/Report no.: 
SFB/TR 15 Discussion Paper No. 353
Publisher: 
Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY), München
Abstract: 
This paper examines the effects of European Commission's (EC) new leniency program on the EC's capabilities in detecting and deterring cartels. As a supplementary analysis, the US leniency is studied. I discuss a dynamic model of cartel formation and dissolution to illustrate how changes in antitrust policies and economic conditions might affect cartel duration. Comparative statics results are then corroborated with empirical estimates of hazard functions adjusted to account for both the heterogeneity of cartels and the time-varying policy impacts suggested by theory. Contrary to earlier studies, my statistical tests are consistent with the theoretic predictions that following an efficacious leniency program, the average duration of discovered cartels rises in the short run and falls in the long run. The results shed light on the design of enforcement programs against cartels and other forms of conspiracy.
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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