TEL  Vol.2 No.5 , December 2012
The Impact of Different Antitrust Laws on the Actions of Cartels
ABSTRACT
The issues about antitrust laws are getting much attention nowadays. And many countries over the world adopt leniency policies to control the actions of cartels. We used a game-theoretical model to discuss the equilibrium of cartels under different antitrust laws. And we modify the model of Blum et al. [1] to analyze the equilibriums of firms under the different mechanisms of leniency policies. We find out that the value of fine will affect the existence of a cartel, and the recognitions of legitimacies for cartels are important as well. When the antitrust authorities ask firms to propose appliances in advance to let the cartels be legal, firms would incline not to become a cartel. It’s quite different from the other mechanism which firms can confess to the antitrust authorities after they’ve already become a cartel.

Cite this paper
J. Wang and Y. Chen, "The Impact of Different Antitrust Laws on the Actions of Cartels," Theoretical Economics Letters, Vol. 2 No. 5, 2012, pp. 455-458. doi: 10.4236/tel.2012.25085.
References
[1]   U. Blum, N. Steinat and M. Veltins, “On the Rationale of Leniency Programs: A Game-theoretical Analysis,” European Journal of Law and Economics, Vol. 25, No. 3, 2008, pp. 209-229. doi:10.1007/s10657-008-9046-x

[2]   M. Motta and M. Polo, “Leniency Programs and Cartel Prosecution,” International Journal of Industrial Organization, Vol. 21, No. 3, 2003, pp. 347-379. doi:10.1016/S0167-7187(02)00057-7

[3]   C. Ellis and W. Wilson, “Cartels, Price-fixing, and Corporate Leniency Policy: What Doesn’t Kill Us Makes Us Stronger,” University of Oregon, Eugene, 2003.

[4]   G. Spagnolo, “Divide et Impera—Optimal Deterrence Mechanisms against Cartels (and Organized Crime),” FEEM Working Paper, Milano, 2004.

[5]   C. Aubert, P. Rey and W. E. Kovacic, “The Impact of Leniency and Whistle-Blowing Programs on Cartels,” International Journal of Industrial Organization, Vol. 24, No. 6, 2006, pp. 1241-1266. doi:10.1016/j.ijindorg.2006.04.002

[6]   A. Chavda and M. Jegers, “The Effects of Leniency Programs and Fines on Cartel Stability,” Metroeconomica, Vol. 58, No. 2, 2007, pp. 231-243. doi:10.1111/j.1467-999X.2007.00266.x

 
 
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