The effects of private damage claims on cartel activity: Experimental evidence

Arbeitspapier

Private damage claims against cartels may have negative effects on leniency: whereas whistleblowers obtain full immunity regarding the public cartel fines, they have no or only restricted protection against private third-party damage claims. This may stabilize cartels. We run an experiment to study this issue. Firms choose whether to join a cartel, may apply for leniency afterwards, and then potentially face private damages. We find that the implementation of private damage claims reduces cartel formation but makes cartels indeed more stable. The negative effect of damages is avoided in a novel setting where the whistleblower is also protected from damages.

Object Details

• ISBN: 978-3-86304-597-5
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: DICE Discussion Paper ; No. 315

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: General ; Monopolization; Horizontal Anticompetitive Practices ; Antitrust Policy and Public Enterprises, Nonprofit Institutions, and Professional Organizations
• Subject: Private damage claims ; cartel stability ; laboratory experiment ; leniency

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bodnar, Olivia ; Fremerey, Melinda ; Normann, Hans-Theo ; Schad, Jannika Leonie
• Event: Veröffentlichung
• (who): Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
• (where): Düsseldorf
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/235205
• Last update: 10.03.2025, 11:43 AM CET