Thursday, December 13, 2012
Posted by D. Daniel Sokol
Joan Ramon Borrell (Universitat de Barcelona), Juan Luis Jimenez (Universidad de Las Palmas de Gran Canaria) and Carmen Garcia (Universidad Carlos III and Universidad de Las Palmas de Gran Canaria) are Evaluating antitrust leniency programs.
ABSTRACT: This paper identifies and then quantifies econometrically the impact of leniency programs on the perception of the effectiveness of antitrust policies in the business community using panel data for as much as 59 countries and 14-year span. We use the dynamics of the gradual diffusion of leniency programs across countries and over time to evaluate the impact of the program, taking care of the bias caused by self-selection into the program. We find that leniency programs increase the perception of effectiveness by an order of magnitude ranging from 10% to 21%. Leniency programs have become weapons of mass dissuasion in the hands of antitrust enforcers against the more damaging forms of explicit collusion among rival firms in the market place.