Homework 3
Instructions
Upload this homework into the homework vaults in the IS no later than on 28/3 at 23.59. The
homework submitted after this date can be evaluated only if you have an excuse in the IS for at least
3 working days in the week between the given lectures and seminars (from these five: Wed, Thu, Fri,
Mon, Tue) and the teacher has given you an alternative date when you submit your homework. We
expect that you write the homework on your own. Should your answers resemble with the answers
in someone else’s homework, we might deduct points from your score. We appreciate the effort and
thorough thinking (whether your answers make sense, whether you have supported all your claims
by careful argumentation, whether your answers are informed by data). Try to formulate ideas as
concisely as possible. Certainly do not add any "dummy text" just in order to get closer to the
maximum extent. The final document can be inserted into the System in all standard formats (doc,
docx, odt, pdf, ...). Print your homework and take it to the seminar on 29/3. Title the document
Homework 3 (your name and surname will be added to the name of the document automatically).
Put your name and surname on the top of your homework.
Task (8 points, maximum 1000 words)
Read the paper by Hinloopen and Setevent (2008) and briefly answer the following questions. Please,
use your own formulations. Do not copy sentences or formulations from the paper:
1. Why an increase in the number of detected cartels after the introduction of leniency does
not necessarily mean that the program is successful?
2. Why is the experimental method suitable for cartel research?
3. What are the two possible definitions of cartel based on the experimental data obtained in
the paper?
4. Why come fewer cartels into existence under Antitrust and Leniency?
5. What is the difference in the price-discussing behavior of the subjects under Antitrust and
Leniency?
6. Why are cartels under Leniency less successful in establishing high market prices?
7. What is the protection-from-fines effect of Leniency?
8. Why does leniency reduce prices? Provide a short summary.