Leniency clauses, offering cartelists legal immunity if they blow the whistle on each other, is a recent anti-trust innovation. The authorities wish to thwart cartels and promote competition. This effect is not evident, however; whistle-blowing may enforce trust and collusion by providing a tool...

Collusion sustainability depends on firms' ability to impose sufficiently severe punishments in the event of deviation from the collusive rule. We extend results from the literature on optimal collusion by investigating the role of a limited liability constraint. We examine all situations in...