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Leniency program: A new Tool in Competition Policy to deter Cartel Activity in Procurement Auctions

This paper discusses the impact of a leniency program on incentives within cartels. The objective of this program is to encourage a cartel member to confess and implicate his co-conspirators with hard evidence about their collusive agreement. We develop a simple model of cartel behavior under a first-price sealed-bid procurement auction and we show how an effective leniency program can prevent the internal coordination of cartel members.
European Journal of Law and Economics, 17, 5-19