Premium
THE EFFECTS OF LENIENCY PROGRAMS AND FINES ON CARTEL STABILITY
Author(s) -
Chavda Ankur,
Jegers Marc
Publication year - 2007
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/j.1467-999x.2007.00266.x
Subject(s) - cartel , stylized fact , oligopoly , collusion , competition (biology) , economics , microeconomics , industrial organization , business , law and economics , cournot competition , macroeconomics , ecology , biology
Using a stylized oligopoly model, we analyze the effect of cartel deterring fines, taking into consideration exemptions granted to cartel members cooperating with the competition authorities. We conclude that the fines can act as a deterrent to breaking collusive agreements, thus stabilizing the cartel.