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How the new leniency program in Korea affect cartel formation and cartel detection?

Author

Listed:
  • Hyo Won Lee

    (Yonsei University)

  • Yun Jeong Choi

    (Yonsei University)

Abstract

The corporate leniency program has played an important role in detecting cartels that damages consumer welfare and competition. This study investigates the impacts of Korea¡¯s leniency revision in 2005 on cartel stability by using a Poisson regression. The estimation results show that the new leniency program increases the detection rate and decreases the formation rate, confirming the validity of the theoretical model of Miller(2008). Therefore, the effectiveness of the full leniency to the first applicants under the new leniency program provides some policy implication on the revision direction of the leniency program.

Suggested Citation

  • Hyo Won Lee & Yun Jeong Choi, 2014. "How the new leniency program in Korea affect cartel formation and cartel detection?," Working papers 2014rwp-65, Yonsei University, Yonsei Economics Research Institute.
    • Handle: RePEc:yon:wpaper:2014rwp-65
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    Keywords

    Collusion; Corporate Leniency Program; Poisson regression; Cartel duration;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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