Information Bargaining in Leniency Programs

Abstract: This essay presents a set of reforms for the Swedish competition authority’s leniency program. The leniency program is viewed as a tool for information bargaining in environments where information is unequally distributed. Within this context two different settings are explored. In the first information is complete but imperfectly distributed. In the second information is incomplete and imperfectly distributed. Each setting provides its own aspect on how reform could enhance the Swedish leniency program’s influence in terms of successful cartel prosecution. An Extension of the leniency program to include cartel ringleaders and potentially more than one conspirator is proposed. Such reforms would raise overall welfare by increasing deterrence through greater total penalties and through enhancing the incentives for conspirators to convey information to the competition authority.