Optimal Auditing Under Intermediated Contracting
AbstractThis paper builds on Faure-Grimaud and Martimort’s [Economics Letters 71 (2001) 75-82] analysis of intermediated contracting. I argue that intermediated contracting permits one form of auditing, in which the sub-contract offered to the firm is examined, contingent on the intermediary’s report. Auditing reduces the intermediary’s rent and increases allocative efficiency.
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Bibliographic InfoPaper provided by EconWPA in its series Microeconomics with number 0411003.
Length: 7 pages
Date of creation: 18 Nov 2004
Date of revision:
Note: Type of Document - pdf; pages: 7
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Intermediated Contracting; Grand Contract; Optimal Auditing.;
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-11-22 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Faure-Grimaud, Antoine & Martimort, David, 2001. "On some agency costs of intermediated contracting," Economics Letters, Elsevier, vol. 71(1), pages 75-82, April.
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