What if cartel members can use leniency programs strategically?

The theoretical framework of the adequacy of leniency programme reductions has been widely explored but the characteristics of the reporting cartel members remain unexplained. This article empirically analyzes reporting firms... [ view full abstract ]

The theoretical framework of the adequacy of leniency programme reductions has been widely explored but the characteristics of the reporting cartel members remain unexplained. This article empirically analyzes reporting firms which received fine immunity in the EU or the US. Being the first reporting firm is shown to be highly correlated with recidivism and the severity of the punishment. Different definitions of recidivism, as well as the debate on the amount of US recidivism, are explored. An analysis of the interaction between EU multiple offenders suggests that they may be able to use leniency to sustain multi-market collusion and coordinate leniency applications. The implications of the existing policy gaps, for deterrence, are discussed in the paper.