S-WoPEc
 
Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
Research Institute of Industrial Economics (IFN) Working Paper Series

No 859:
Trust, Leniency and Deterrence

Maria Bigoni (), Sven-Olof Fridolfsson (), Chloe Le Coq () and Giancarlo Spagnolo ()

Abstract: This paper presents results from a laboratory experiment studying the channels through which different law enforcement strategies deter cartel formation. With leniency policies offering immunity to the first reporting party, a high fine is the main determinant of deterrence, having a strong effect even when the probability of exogenous detection is zero. Deterrence appears to be mainly driven by ‘distrust’; here, the fear of partners deviating and reporting. Absent leniency, the probability of detection and the expected fine matter more, and low fines are exploited to punish defections. The results appear relevant to several other forms of crimes that share cartels’ strategic features, including corruption and financial fraud.

Keywords: Antitrust; Betrayal; Collusion; Corruption; Distrust; Fraud; Organized Crime; Whistleblowers; (follow links to similar papers)

JEL-Codes: C92; D03; K21; K42; L41; (follow links to similar papers)

38 pages, January 17, 2011, Revised December 11, 2014

Before downloading any of the electronic versions below you should read our statement on copyright.
Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.

Full text versions of the paper:

wp859.pdf    PDF-file
Download Statistics

Questions (including download problems) about the papers in this series should be directed to Elisabeth Gustafsson ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:iuiwop:0859 This page was generated on 2016-10-12 00:00:54