Cartel simulation - Revision history

Baumareb at 18:41, 22 January 2023

2023-01-22T18:41:21Z

Baumareb at 18:39, 22 January 2023

2023-01-22T18:39:32Z

Baumareb at 18:38, 22 January 2023

2023-01-22T18:38:52Z

Baumareb at 18:33, 22 January 2023

2023-01-22T18:33:27Z

Baumareb at 15:38, 18 January 2023

2023-01-18T15:38:43Z

Baumareb at 15:33, 18 January 2023

2023-01-18T15:33:12Z

Baumareb at 15:26, 18 January 2023

2023-01-18T15:26:05Z

Baumareb at 15:20, 18 January 2023

2023-01-18T15:20:33Z

Baumareb at 15:14, 18 January 2023

2023-01-18T15:14:39Z

Baumareb at 14:53, 18 January 2023

2023-01-18T14:53:59Z

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 * The more enforcement officials, the less cartels there are in total. This can be seen when changing the number of enforcers in the input field.
-Note: These conclusions have been drawn from extensive literture review. They have merely been implemented in the simulation. From the simulation itself, no new conclusions can be drawn, as it is simply a representation of the market itself. I hereby disclaim any responsibility for any discrepancies with the actual conditions, should inconsistencies with other studies arise.
+Note: These conclusions have been drawn from extensive literture review. They have merely been implemented in the simulation. From the simulation itself, no new conclusions can be drawn, as it is simply a representation of the market itself. The author hereby disclaims any responsibility for any discrepancies with further research, should inconsistencies with other studies arise.
 ==Code==

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 * Combe, E., Monnier, C., & Legal, R. (2008). Cartels: The probability of getting caught in the European Union. Available at SSRN 1015061.
 * Harrington Jr, J. E., & Chang, M. H. (2015). When can we expect a corporate leniency program to result in fewer cartels?. The Journal of Law and Economics, 58(2), 417-449.
 * Marvao, C. (2016). The EU leniency programme and recidivism. Review of Industrial Organization, 48(1), 1-27.
 * Mihai, B. (2008). Cartels–between theory, leniency policy and fines. Annals of Faculty of Economics, 1(1), 549-552.

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 The enforcement officials are together tackling some stable and some unstable cartels. To take down a stable cartel, it takes 4 years (= four ticks in NetLogo). To take down an unstable cartel, it only takes 2 years (= two ticks in NetLogo).
 We can then see the birth, death, and prosecution pre leniency in the following simulation:
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-The number of all the cartels is constantly around the number of 27 cartels, on the left hand side there is a monitor showing how the number of the stable and the unstable cartels are changing over time.
+The number of all the cartels is constantly around the number of about 30 cartels, on the left hand side there is a monitor showing how the number of the stable and the unstable cartels are changing over time.
-Cartels do have an average life expectancy between 7.5 and 7.7 years according to Combe et al. (2008). Harrington and Chang (2015) explain that stable cartels in general have a higher life expectancy than unstable cartels. Thus, in my simulation, I have assigned a life duration of 6 to 11 years to stable cartels and 3 to 6 years to unstable cartels. This should more or less result in an average life expectany of 7.5 to 7.7 years for all the cartels taken together.
+Cartels do have an average life expectancy between 7.5 and 7.7 years according to Combe et al. (2008) as well as the data from the European Commission. Harrington and Chang (2015) explain that stable cartels in general have a higher life expectancy than unstable cartels. Thus, in my simulation, I have assigned a life duration of 6 to 11 years to stable cartels and 3 to 6 years to unstable cartels. This should more or less result in an average life expectany of 7.5 to 7.7 years for all the cartels taken together.
 '''With leniency program'''

← Older revision		Revision as of 18:33, 22 January 2023
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	[[File:Simulation-assignment-baur00-final.nlogo]]		[[File:Simulation-assignment-baur00-final.nlogo]]
		+
		+	==References==
		+
		+	* Brenner, S. (2009). An empirical study of the European corporate leniency program. International Journal of Industrial Organization, 27(6), 639-645.
		+	* Combe, E., Monnier, C., & Legal, R. (2008). Cartels: The probability of getting caught in the European Union. Available at SSRN 1015061.
		+	* Harrington Jr, J. E., & Chang, M. H. (2015). When can we expect a corporate leniency program to result in fewer cartels?. The Journal of Law and Economics, 58(2), 417-449.
		+	* Marvao, C. (2016). The EU leniency programme and recidivism. Review of Industrial Organization, 48(1), 1-27.
		+	* Mihai, B. (2008). Cartels–between theory, leniency policy and fines. Annals of Faculty of Economics, 1(1), 549-552.

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 It is clearly visible that with more enforcement officials, the total number of cartels is significantly lower then with less officials.
-==Conclusion==
+* The leniency program influenced non-leniency enforcement. If the leniency program is applied, stable cartels have a higher life expectancy than before, because enforcement officials are focused on unstable cartels which might have died soon, anyway.
+* The more enforcement officials, the less cartels there are in total. This can be seen when changing the number of enforcers in the input field.
 ==Code==

← Older revision		Revision as of 15:33, 18 January 2023
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	==Code==		==Code==
−	[~~add text~~]	+
		+	Here the NetLogo file can be downloaded: https://www.simulace.info/index.php/File:Simulation-assignment-baur00-final.nlogo
		+
		+	[[File:Simulation-assignment-baur00-final.nlogo]]

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 So, how to use?
-First step: Open the model in NetLogo
+* First step: Open the model in NetLogo
-Second step: Click on the "Setup" button
+* Second step: Click on the "Setup" button
-Third step: Click on the "go" button
+* Third step: Click on the "go" button
-Fourth step: Click on the "add leniency program" button
+* Fourth step: Click on the "add leniency program" button
 And then, as a "special", you can also add the number of enforcement officials. It shows that when there are more enforcers, there will be less cartels in the total simulation, since there is more workforce to take down the cartels. Below, see the comparison between having a 100 officials versus 200 officials, including the leniency program applied in the middle of the simulation and then stopped again:

← Older revision		Revision as of 15:20, 18 January 2023
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	Fourth step: Click on the "add leniency program" button		Fourth step: Click on the "add leniency program" button

−	And then, as a "special", you can also add the number of enforcement officials. It shows that when there are more enforcers, there will be less cartels in the total simulation, since there is more workforce to take down the cartels. Below, see the comparison between having a 100 officials versus 200 officials:	+	And then, as a "special", you can also add the number of enforcement officials. It shows that when there are more enforcers, there will be less cartels in the total simulation, since there is more workforce to take down the cartels. Below, see the comparison between having a 100 officials versus 200 officials, including the leniency program applied in the middle of the simulation and then stopped again:
		+
		+
		+	[[File:Number-of-enforcers.JPG]]
		+
		+
		+	It is clearly visible that with more enforcement officials, the total number of cartels is significantly lower then with less officials.

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 == How to use the program ==
-[add text]
+So, how to use?
 ==Conclusion==

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 '''With leniency program'''
-[add text here]
+Sp now I simulate the situation when there is a leniency program. Since the unstable cartels want to avoid getting fined, there is a race for leniency application (they want to be the first of the cartel members to apply for it since in that case their fine will be reduced). This decreases the life duration of unstable cartels. At the same time, the life duration of stable cartel increases, since the enforcement officials are more focused on the unstable cartels. The below simulation shows that as soon as the leniency program is added, the number of unstable cartels (yellow) decreases, while the number of stable cartels (red) increases:
 == How to use the program ==