ASCOLA Competition Law series
Edited by Roger Zäch, Andreas Heinemann and Andreas Kellerhals
Chapter 8: Cartel Deterrence and Settlements: The Brazilian Experience
Paulo Furquim de Azevedo* and Alexandre Lauri Henriksen** 1 INTRODUCTION There is not much controversy that settlements are an important part of a policy of cartel deterrence (Hammond, 2006a; Connor, 2007). Some authors emphasise the win–win feature of negotiated procedures to abbreviate the administrative and judicial disputes related to cartel prosecution as opposed to fully adversarial procedures (Landes, 1971; Scott and Stuntz, 1992; Wils, 2008). This almost consensus1 in the literature is absolutely expected, provided that parties are rational and do not have significant cognition problems. In as much as litigation costs may be avoided and the fully adversarial procedure is always an alternative to the settlement, parties must be at least better off if they opt to settle a case. More relevant and with important policy implications is the discussion about the appropriate design of this type of contract, particularly because it is not a trivial solution given the information asymmetry between the competition authority and defendants, and the complex interaction among settlements and other investigative mechanisms, such as leniency agreements. This chapter addresses this issue both theoretically, by means of a simple game theoretical model, and empirically, by means of the Brazilian experience. A quite straightforward model explores the relationship among three alternatives available to cartel participants: pursuing the trial, engaging in a leniency agreement, or settling the case. The model leaves out the * Commissioner at CADE-Brazil and Professor of Economics at Getúlio Vargas Foundation - FGV-EESP. ** From CADE-Brazil. 1 Although the literature is quite convergent...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.