IDEAS home Printed from https://ideas.repec.org/p/trf/wpaper/395.html
   My bibliography  Save this paper

Delays in Leniency Application: Is There Really a Race to the Enforcer's Door?

Author

Listed:
  • Gärtner, Dennis L.
  • Zhou, Jun

Abstract

This paper studies cartels’ strategic behavior in delaying leniency applications, a take-up decision that has been ignored in the previous literature. Using European Commission decisions issued over a 16-year span, we show, contrary to common beliefs and the existing literature, that conspirators often apply for leniency long after a cartel collapses. We estimate hazard and probit models to study the determinants of leniency-application delays. Statistical tests find that delays are symmetrically affected by antitrust policies and macroeconomic fluctuations. Our results shed light on the design of enforcement programs against cartels and other forms of conspiracy.

Suggested Citation

  • Gärtner, Dennis L. & Zhou, Jun, 2012. "Delays in Leniency Application: Is There Really a Race to the Enforcer's Door?," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 395, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    • Handle: RePEc:trf:wpaper:395
    as

    Download full text from publisher

    File URL: https://epub.ub.uni-muenchen.de/14315/1/395.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Spagnolo, Giancarlo, 2006. "Leniency and Whistleblowers in Antitrust," CEPR Discussion Papers 5794, C.E.P.R. Discussion Papers.
    2. repec:cup:cbooks:9780521818728 is not listed on IDEAS
    3. Joseph E. Harrington, Jr., 2011. "Corporate Leniency with Private Information: The Push of Prosecution and the Pull of Pre-emption," Economics Working Paper Archive 573, The Johns Hopkins University,Department of Economics.
    4. Motta, Massimo & Polo, Michele, 2003. "Leniency programs and cartel prosecution," International Journal of Industrial Organization, Elsevier, vol. 21(3), pages 347-379, March.
    5. John Haltiwanger & Joseph E. Harrington Jr., 1991. "The Impact of Cyclical Demand Movements on Collusive Behavior," RAND Journal of Economics, The RAND Corporation, vol. 22(1), pages 89-106, Spring.
    6. repec:cup:cbooks:9780521117197 is not listed on IDEAS
    7. repec:cup:cbooks:9780521524131 is not listed on IDEAS
    8. Margaret C. Levenstein & Valerie Y. Suslow, 2011. "Breaking Up Is Hard to Do: Determinants of Cartel Duration," Journal of Law and Economics, University of Chicago Press, vol. 54(2), pages 455-492.
    9. Hélder Vasconcelos, 2008. "Sustaining Collusion in Growing Markets," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 17(4), pages 973-1010, December.
    10. repec:cup:cbooks:9780521818742 is not listed on IDEAS
    11. repec:cup:cbooks:9780521524117 is not listed on IDEAS
    12. Joseph E. Harrington, 2008. "Optimal Corporate Leniency Programs," Journal of Industrial Economics, Wiley Blackwell, vol. 56(2), pages 215-246, June.
    13. Jacquemin, Alexis & Nambu, Tsuruhiko & Dewez, Isabelle, 1981. "A Dynamic Analysis of Export Cartels: The Japanese Case," Economic Journal, Royal Economic Society, vol. 91(363), pages 685-696, September.
    14. George Symeonidis, 2002. "The Effects of Competition: Cartel Policy and the Evolution of Strategy and Structure in British Industry," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262194686, December.
    15. Nathan H. Miller, 2009. "Strategic Leniency and Cartel Enforcement," American Economic Review, American Economic Association, vol. 99(3), pages 750-768, June.
    16. repec:cup:cbooks:9780521818735 is not listed on IDEAS
    17. repec:cup:cbooks:9780521524124 is not listed on IDEAS
    18. Porter, Robert H, 1985. "On the Incidence and Duration of Price Wars," Journal of Industrial Economics, Wiley Blackwell, vol. 33(4), pages 415-426, June.
    19. Kaplow, Louis & Shavell, Steven, 1994. "Optimal Law Enforcement with Self-Reporting of Behavior," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 583-606, June.
    20. Reinhard Selten, 1973. "A Simple Model of Imperfect Competition, where 4 are Few and 6 are Many," Center for Mathematical Economics Working Papers 008, Center for Mathematical Economics, Bielefeld University.
    21. Mathias Dewatripont & Lars Peter Hansen & Stephen Turnovsky, 2003. "Advances in economics and econometrics :theory and applications," ULB Institutional Repository 2013/9557, ULB -- Universite Libre de Bruxelles.
    22. Myong-Hun Chang & Joseph E. Harrington, Jr., 2008. "The Impact of a Corporate Leniency Program on Antitrust Enforcement and Cartelization," Economics Working Paper Archive 548, The Johns Hopkins University,Department of Economics.
    23. repec:cup:cbooks:9780521295642 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dennis L. Gärtner, 2022. "Corporate Leniency in a Dynamic World: The Preemptive Push of an Uncertain Future," Journal of Industrial Economics, Wiley Blackwell, vol. 70(1), pages 119-146, March.
    2. Jun Zhou, 2016. "The Rise and Fall of Cartels with Multi-market Colluders," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 48(4), pages 381-403, June.
    3. Catarina Marvão, 2016. "The EU Leniency Programme and Recidivism," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 48(1), pages 1-27, February.
    4. Tanja Artiga González & Markus Schmid & David Yermack, 2019. "Does Price Fixing Benefit Corporate Managers?," Management Science, INFORMS, vol. 65(10), pages 4813-4840, October.
    5. Claudia M. Landeo & Kathryn E. Spier, 2020. "Optimal Law Enforcement with Ordered Leniency," Journal of Law and Economics, University of Chicago Press, vol. 63(1), pages 71-111.
    6. Catarina Marvão & Giancarlo Spagnolo, 2018. "Cartels and leniency: Taking stock of what we learnt," Chapters, in: Luis C. Corchón & Marco A. Marini (ed.), Handbook of Game Theory and Industrial Organization, Volume II, chapter 4, pages 57-90, Edward Elgar Publishing.
    7. Jeong Yeol Kim & Charles N. Noussair, 2023. "Leniency Policies and Cartel Success: An Experiment," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 63(2), pages 187-210, September.
    8. Juan Luis Jiménez & Manuel Ojeda-Cabral & José Manuel Ordóñez-de-Haro, 2023. "Who Blows the Whistle on Cartels? Finding the Leniency Applicant at the European Commission," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 63(2), pages 123-153, September.
    9. Marvão, Catarina, 2014. "Heterogeneous Penalties and Private Information," Konkurrensverket Working Paper Series in Law and Economics 2014:1, Konkurrensverket (Swedish Competition Authority).
    10. Georg Clemens & Holger A. Rau, 2019. "Do discriminatory leniency policies fight hard‐core cartels?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(2), pages 336-354, April.
    11. Hoang, Cung Truong & Hüschelrath, Kai & Laitenberger, Ulrich & Smuda, Florian, 2014. "Determinants of self-reporting under the European corporate leniency program," International Review of Law and Economics, Elsevier, vol. 40(C), pages 15-23.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gärtner, D.L. & Zhou, J., 2012. "Delays in Leniency Application : Is There Really a Race to the Enforcer’s Door?," Discussion Paper 2012-044, Tilburg University, Tilburg Law and Economic Center.
    2. Gärtner, D.L. & Zhou, J., 2012. "Delays in Leniency Application : Is There Really a Race to the Enforcer’s Door?," Other publications TiSEM cbb8fac0-0cd7-4a0c-a6d4-a, Tilburg University, School of Economics and Management.
    3. Jun Zhou, 2016. "The dynamics of leniency application and the knock-on effect of cartel enforcement," Working Papers 13042, Bruegel.
    4. Houba Harold & Motchenkova Evgenia & Wen Quan, 2015. "The Effects of Leniency on Cartel Pricing," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 15(2), pages 351-389, July.
    5. Panayiotis Agisilaou, 2013. "Collusion in Industrial Economics and Optimally Designed Leniency Programmes - A Survey," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2013-03, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    6. Zhou, Jun, 2011. "Evaluating Leniency with Missing Information on Undetected Cartels: Exploring Time-Varying Policy Impacts on Cartel Duration," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 353, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    7. Jochem, Annabelle & Parrotta, Pierpaolo & Valletta, Giacomo, 2020. "The impact of the 2002 reform of the EU leniency program on cartel outcomes," International Journal of Industrial Organization, Elsevier, vol. 71(C).
    8. Jun Zhou, 2016. "The Rise and Fall of Cartels with Multi-market Colluders," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 48(4), pages 381-403, June.
    9. Swoboda, Sandra Maria, 2018. "Market structure and cartel duration: Evidence from detected EU cartel cases," Arbeitspapiere 184, University of Münster, Institute for Cooperatives.
    10. Catarina Marvão & Giancarlo Spagnolo, 2018. "Cartels and leniency: Taking stock of what we learnt," Chapters, in: Luis C. Corchón & Marco A. Marini (ed.), Handbook of Game Theory and Industrial Organization, Volume II, chapter 4, pages 57-90, Edward Elgar Publishing.
    11. Asker, John, 2010. "Leniency and post-cartel market conduct: Preliminary evidence from parcel tanker shipping," International Journal of Industrial Organization, Elsevier, vol. 28(4), pages 407-414, July.
    12. Ulrich Blum & Nicole Steinat & Michael Veltins, 2008. "On the rationale of leniency programs: a game-theoretical analysis," European Journal of Law and Economics, Springer, vol. 25(3), pages 209-229, June.
    13. Buccirossi, Paolo & Spagnolo, Giancarlo, 2006. "Leniency policies and illegal transactions," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1281-1297, August.
    14. Hinloopen, Jeroen & Onderstal, Sander, 2014. "Going once, going twice, reported! Cartel activity and the effectiveness of antitrust policies in experimental auctions," European Economic Review, Elsevier, vol. 70(C), pages 317-336.
    15. Salvatore Piccolo & Giovanni Immordino, 2012. "Optimal Accomplice-Witnesses Regulation under Asymmetric Information," CSEF Working Papers 304, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    16. Marvão, Catarina, 2014. "Heterogeneous Penalties and Private Information," Konkurrensverket Working Paper Series in Law and Economics 2014:1, Konkurrensverket (Swedish Competition Authority).
    17. Sven Heim & Kai Hhschelrath & Ulrich Laitenberger & Yossi Spiegel, 2017. "Minority Share Acquisitions and Collusion: Evidence from the Introduction of National Leniency Programs," Working Papers hal-01952937, HAL.
    18. Evgenia Motchenkova & Rob Laan, 2011. "Strictness of leniency programs and asymmetric punishment effect," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 58(4), pages 401-431, December.
    19. Maria Bigoni & Sven-Olof Fridolfsson & Chloé Le Coq & Giancarlo Spagnolo, 2015. "Trust, Leniency, and Deterrence," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 31(4), pages 663-689.
    20. Chen, Zhiqi & Ghosh, Subhadip & Ross, Thomas W., 2015. "Denying leniency to cartel instigators: Costs and benefits," International Journal of Industrial Organization, Elsevier, vol. 41(C), pages 19-29.

    More about this item

    Keywords

    corporate leniency program; cartel; leniency application delays;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:trf:wpaper:395. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tamilla Benkelberg (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.