The 10 reference contexts in paper Motchenkova (2004) “Effects of Leniency Programs on Cartel Stability” / RePEc:tiu:tiucen:d6321c1e-b79a-4aae-8ef5-d1d6f24d9403

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    In this paper we give some insights into the analysis of these problems. This problem also falls into a wider class of models, which analyze optimal policies for the deterrence of violations of antitrust law in the presence of leniency schemes, such as
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    Motta and Polo (2003),
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    Spagnolo (2000), Malik (1993) or Hinloopen (2003). In particular, we study the problem of how an additional enforcement instrument, such as a leniency program, influences the stability of cartels under two different regimes offines,fixed and proportional.
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    6197
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    This problem also falls into a wider class of models, which analyze optimal policies for the deterrence of violations of antitrust law in the presence of leniency schemes, such as Motta and Polo (2003), Spagnolo (2000), Malik (1993) or
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    Hinloopen (2003).
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    In particular, we study the problem of how an additional enforcement instrument, such as a leniency program, influences the stability of cartels under two different regimes offines,fixed and proportional.
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    Comparison of these two regimes implies that, if the rules of leniency programs and the procedure of application for leniency are more strict, cartel occurrence is less likely. A number of earlier papers have studied the problem of self-reporting. Malik (1993) and
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    Kaplow and Shavell (1994)
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    were thefirst to identify the potential benefits of schemes which elicit self-reporting by violators. They conclude that self-reporting may reduce enforcement costs and improve risk-sharing, as risk-averse self-reporting individuals face a certain penalty rather than the stochastic penalty faced by non-reporting violators.
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    They conclude that self-reporting may reduce enforcement costs and improve risk-sharing, as risk-averse self-reporting individuals face a certain penalty rather than the stochastic penalty faced by non-reporting violators. A similar paper in this field is
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    Innes (1999),
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    who considers an extension of environmental self-reporting schemes. The use of leniency programs in antitrust has been extensively studied by Motta and Polo (2003). They show that such programs might have an important role in the prosecution of cartels provided thatfirms can apply for leniency after an investigation has started.
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    -reporting may reduce enforcement costs and improve risk-sharing, as risk-averse self-reporting individuals face a certain penalty rather than the stochastic penalty faced by non-reporting violators. A similar paper in this field is Innes (1999), who considers an extension of environmental self-reporting schemes. The use of leniency programs in antitrust has been extensively studied by
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    Motta and Polo (2003).
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    They show that such programs might have an important role in the prosecution of cartels provided thatfirms can apply for leniency after an investigation has started. They conclude that, if given the possibility to apply for leniency, thefirm might well decide to give up its participation in the cartel in thefirst place.
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    They alsofind that leniency saves resources for the authority. Finally, their formal analysis shows that leniency should only be used when the antitrust authority has limited resources, so that a leniency program is not unambiguously optimal. The paper by
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    Motta and Polo (2003)
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    is closely related to the paper by Spagnolo (2000). He shows that only courageous leniency programs that reward self-reporting parties may completely and costlessly deter collusion, while moderate leniency programs that reduce or cancel sanctions for the reporting party cannot affect organized crime.
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    He shows that only courageous leniency programs that reward self-reporting parties may completely and costlessly deter collusion, while moderate leniency programs that reduce or cancel sanctions for the reporting party cannot affect organized crime. A next attempt to study the efficiency of leniency programs in antitrust enforcement was made in
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    Feess and Walzl (2003).
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    They developed a model to analyze and compare leniency programs in the EU and the USA. For that purpose they constructed a stage-game with two self-reporting stages, heterogeneous types with respect to the amount of evidence provided, and ex post asymmetric information; and solve it by backward induction.
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    Further, in section 4 we introduce more players and study a timing game with two identicalfirms forming the cartel after leniency programs are introduced. In this part we suggest a new approach to the problem of the analysis of efficiency of the leniency programs that differs from the earlier papers by
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    Motta and Polo (2003)
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    or Feess and Walzl (2003) and that is based on the Reiganum-Fudenberg-Tirole Model. Reiganum (1981) and Fudenberg and Tirole (1985) have applied timing games to a technology adoption process. We apply a similar procedure to a cartel formation between twofirms in the presence of a leniency program.
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    Further, in section 4 we introduce more players and study a timing game with two identicalfirms forming the cartel after leniency programs are introduced. In this part we suggest a new approach to the problem of the analysis of efficiency of the leniency programs that differs from the earlier papers by Motta and Polo (2003) or
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    Feess and Walzl (2003) and
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    that is based on the Reiganum-Fudenberg-Tirole Model. Reiganum (1981) and Fudenberg and Tirole (1985) have applied timing games to a technology adoption process. We apply a similar procedure to a cartel formation between twofirms in the presence of a leniency program.
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    In this part we suggest a new approach to the problem of the analysis of efficiency of the leniency programs that differs from the earlier papers by Motta and Polo (2003) or Feess and Walzl (2003) and that is based on the Reiganum-Fudenberg-Tirole Model. Reiganum (1981) and
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    Fudenberg and Tirole (1985)
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    have applied timing games to a technology adoption process. We apply a similar procedure to a cartel formation between twofirms in the presence of a leniency program. Section 5 analyses the effects of leniency when the leniency program is less strict.
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