The effectiveness of leniency programs

study the effectiveness of leniency programs when there exists uncertainty about the fine reduction that the firms will receive. The study is an extension to the model of Motta and Polo (2003). The aim is to find a solution for a problem observed in, among others, Korea, where firms abuse the leniency program by repeatedly colluding and subsequently applying for leniency. The study shows that adding extra uncertainty to the model leads to a situation in which firms are less likely to reveal information to the antitrust authority and therefore it reduces the effectiveness of the leniency programs.