Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/204916 
Authors: 
Year of Publication: 
2018
Series/Report no.: 
Discussion Papers No. 18-16
Publisher: 
University of Bern, Department of Economics, Bern
Abstract: 
An antitrust authority deters collusion using fines and a leniency program. It chooses the probability of an investigation. Firms pick the degree of collusion: The more they collude, the higher are profits, but so is the probability of detection. Firms thus trade-off higher profits against higher expected fines. If firms are sufficiently patient, leniency is inffective; it may even increase collusion. Increasing the probability of an investigation at low levels does not increase deterrence. Increasing the probability of an investigation at high levels reduces collusion, yet never completely.
Subjects: 
antitrust
cartels
deterrence
leniency
JEL: 
D43
K21
K42
L40
Document Type: 
Working Paper

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