Language: 日本語 English

Cartels

Author(s): 
Yasuyo Hamaguchi, Toshiji Kawagoe and Aiko Shibata
Date: 
Sat, 2007-09-01
Abstract: 

Antitrust authorities of many countries have been trying to establish appropriate competition policies based on economic analysis. Recently an anti-cartel policy called a "leniency program" has been introduced in many countries as an effective policy to dissolve cartels. In this paper, we studied several kinds of leniency programs through laboratory experiments. We experimentally controlled for three factors: 1) cartel size: the number of cartel members in a group, small (two-person) or large (seven-person), 2) fine schedule: the number of firms that are given reduced fines, and 3) type of immunity: a reduced fine is given to self-reporting firm, or a reward is given to self-reporting firm. The experimental results showed that (1) an increase in the number of cartel members in a group increased the number of cartels dissolved, (2) changing the fine schedule had no significant effect both in the two-player case and in the seven-player case, and (3) positive enforcement such as giving a reward for a self-reporting firm in a courageous leniency program has great impact on dissolving cartel activities.

Author(s): 
Hiroo Iwanari, Toshiji Kawagoe, Taisuke Matsubae, Hirokazu Takizawa
Date: 
Wed, 2007-08-01
Abstract: 

Theoretical research on leniency programs has so far focused attention on cartels formed within a country; the purpose of the paper is to analyze the situation where a cartel is formed internationally. We consider a model with two firms operating in two countries. The antitrust authority (AA) in each country chooses either to implement a leniency program or to use traditional investigation to detect/deter cartel activity. Given the combination of antitrust policies, the two firms play market games simultaneously in both countries. Assuming that the information on the existence of a cartel in one country spills over to the other, we analyze a strategic interdependency faced by the AAs. Several policy objectives of the AA are considered. We find that if the objective is to maximize revenues from the penalty imposed on cartels, an asymmetric equilibrium exists in which one country chooses to free-ride the other's choosing a leniency program.