Self-Defeating Antitrust Laws How Leniency Programs Solve Bertrand’s Paradox and Enforce Collusion in Auctions
Data
01.01.2000
01.01.2000
Autori
Giancarlo Spagnolo
Codice JEL
D43,D44,K21,L41
D43,D44,K21,L41
Parole chiave:
Antitrust law,leniency,self-reporting,cartels,collusion,bid-rigging,oligopoly,auctions
Antitrust law,leniency,self-reporting,cartels,collusion,bid-rigging,oligopoly,auctions
Publisher
Economy and Society
Economy and Society
Editor
Fausto Panunzi
Fausto Panunzi
I find that current US’s and EU’s Antitrust laws — in particular their "moderate"’ leniency programmes that only reduce or at best cancel sanctions for price-fixing firms that self-report — may make collusion enforceable even in one-shot competitive interactions, like Bertrand oligopolies and first-price auctions, where no collusion would be supportable otherwise. The reduced sanctions for firms that self-report provide the otherwise missing credible threat necessary to discipline collusive agreements: they ensure that if a firm unilaterally deviates from collusive strategies, other firms find it convenient to punish it by reporting information to the Antitrust Authority.