Antitrust & Competition Policy Blog

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University of Florida
Levin College of Law

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Thursday, September 9, 2010

Leniency Programs in the Presence of Judicial Errors

Posted by D. Daniel Sokol

Nahom Ghebrihiwet and Evgenia Motchenkova, VU University Amsterdam - Department of Economics, TILEC
discuss Leniency Programs in the Presence of Judicial Errors.

ABSTRACT: We analyze the effects of antitrust and leniency programs in a repeated oligopoly model outlined in Motta and Polo (2003). We extend their framework by including the possibility of Type I judicial errors and pre-trial settlements. Through comparison of our results to the earlier results we come to a number of novel conclusions. Firstly, antitrust enforcement in the presence of judicial errors is less effective and ex-ante deterrence is weaker than was predicted by Motta and Polo (2003). Secondly, adverse effects of leniency programs are underestimated by the traditional approach, which does not take Type I judicial errors into account.

http://lawprofessors.typepad.com/antitrustprof_blog/2010/09/leniency-programs-in-the-presence-of-judicial-errors.html

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