Cartels, Episode 5: If Everyone Can Confess First, Why Form a Cartel?

Opublikowano: 2026-10-08

Leniency programs are supposed to destabilize cartels by rewarding the first participant who comes forward. But that creates an intriguing game-theory puzzle. If every cartel member knows that someone else could confess first, everyone has an incentive to move sooner. Backward induction seems to lead to an extreme prediction: confess immediately—and, therefore, never form the cartel. Reality is different. Cartels still form. This episode examines why. We distinguish cartel detection from deterrence, explain why successfully deterred cartels are largely invisible in the data, and connect leniency to the same problem explored in Ep...