Optimal duplication of effort in advocacy systems
AbstractThe paper focuses on the creation of information for decision-making when agents' effort is non observable and rewards are indirect, that is, only based on the final decision. Following Dewatripont and Tirole (1999), the paper shows that the creation of advocates of special interests, as opposed to non-partisans, generates an efficient mechanism of mutual monitoring that reduces the scope for manipulation. Such monitoring is preferable over imposing penalties for detected manipulation; it is also preferable to creating an agency that monitors the non partisan agent. Applications to transfer price policies and comparative judicial systems are considered.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Behavior & Organization.
Volume (Year): 60 (2006)
Issue (Month): 1 (May)
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Web page: http://www.elsevier.com/locate/jebo
Other versions of this item:
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
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