ABSTRACT: This paper considers whether the use of individual informant rewards or bounties is a viable cartel detection tool. Rewards have the potential to enhance enforcement by revealing infringements that would otherwise go undetected. In order to be effective they should be made available to individuals directly involved in cartels because they may be the only viable source of information. Mere protection from retaliatory measures of employers does not create an adequate incentive to report misbehaviour. The personal costs and risks associated with whistleblowing are so significant that effective rewards may need to amount to a lottery win in order for reporting to be worthwhile. Reward systems pose some dangers to the enforcement system, but these can be managed.
KEYWORDS: Cartel enforcement; whistleblower rewards
CITATION: Stephan, A. (2014) "Is the Korean Innovation of Individual Informant Rewards a Viable Cartel Detection Tool?", CCP Working Paper 14-3