In this Ruled by Reason podcast, a winner of the 18th annual Jerry S. Cohen Award for Antitrust Scholarship, Alminas Žaldokas, discusses his article. The conversation is about “The Effects of Global Leniency Programs on Margins and Mergers” (50 Rand J. of Econ. 883 (2019)) and also features AAI Advisor Daniel Small of Cohen Milstein Sellers & Toll and Seattle University School of Law Professor John B. Kirkwood.

In their article, Žaldokas and co-authors Ailin Dong and Massimo Massa investigated how passage of national leniency programs has affected firms’ margins and merger activity. The authors find that such programs reduce the gross margins of the affected firms, suggesting the programs are effective at reducing cartel activity. However, the authors also find that firms react to such programs by engaging in more mergers, and that those mergers are predominantly anticompetitive as they tend to have negative effects on downstream firms. Their empirical results imply that although leniency programs are generally effective, their benefits are offset to some extent by mergers that substitute for cartels. The authors thus advocate for stronger merger review.

The Cohen Award was created through a trust established in memory of the late Jerry S. Cohen, an outstanding trial lawyer and antitrust writer. It is administered by the law firm he founded, Cohen Milstein Sellers & Toll. The Cohen Award is given each year to the best antitrust writing during the prior year. A list of all Cohen Award winners is here.