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Optimal duplication of effort in advocacy systems

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  • Palumbo, Giuliana

Abstract

The 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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Suggested Citation

  • Palumbo, Giuliana, 2006. "Optimal duplication of effort in advocacy systems," Journal of Economic Behavior & Organization, Elsevier, vol. 60(1), pages 112-128, May.
  • Handle: RePEc:eee:jeborg:v:60:y:2006:i:1:p:112-128
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    1. Paolo Finaldi Russo & Luigi Leva, 2004. "Il debito commerciale in Italia: quanto contano le motivazioni finanziarie?," Temi di discussione (Economic working papers) 496, Bank of Italy, Economic Research and International Relations Area.
    2. Holmstrom, Bengt & Tirole, Jean, 1991. "Transfer Pricing and Organizational Form," Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(2), pages 201-228, Fall.
    3. Maria Rosaria Marino & Chiara Rapallini, 2003. "La composizione familiare e l�imposta sul reddito delle persone fisiche: un�analisi degli effetti redistributivi e alcune considerazioni sul benessere sociale," Temi di discussione (Economic working papers) 477, Bank of Italy, Economic Research and International Relations Area.
    4. Hyun Song Shin, 1998. "Adversarial and Inquisitorial Procedures in Arbitration," RAND Journal of Economics, The RAND Corporation, vol. 29(2), pages 378-405, Summer.
    5. Lipman Barton L. & Seppi Duane J., 1995. "Robust Inference in Communication Games with Partial Provability," Journal of Economic Theory, Elsevier, vol. 66(2), pages 370-405, August.
    6. Paul Milgrom & John Roberts, 1986. "Relying on the Information of Interested Parties," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 18-32, Spring.
    7. Laffont, Jean-Jacques & Tirole, Jean, 1990. "The Politics of Government Decision Making: Regulatory Institutions," Journal of Law, Economics, and Organization, Oxford University Press, vol. 6(1), pages 1-31, Spring.
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    Cited by:

    1. Palumbo, Giuliana & Iossa, Elisabetta, 2002. "Decision rules and information provision: monitoring versus manipulation," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 452, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    2. Chulyoung Kim, 2017. "An economic rationale for dismissing low-quality experts in trial," Scottish Journal of Political Economy, Scottish Economic Society, vol. 64(5), pages 445-466, November.
    3. Chulyoung Kim, 2014. "Partisan Advocates," Bulletin of Economic Research, Wiley Blackwell, vol. 66(4), pages 313-332, October.
    4. Garoupa, Nuno, 2009. "Some reflections on the economics of prosecutors: Mandatory vs. selective prosecution," International Review of Law and Economics, Elsevier, vol. 29(1), pages 25-28, March.
    5. Yves Oytana & Nathalie Chappe, 2016. "Expert opinion in a tort litigation game," Working Papers 2016-13, CRESE.
    6. Chulyoung Kim, 2014. "Adversarial and Inquisitorial Procedures with Information Acquisition," Journal of Law, Economics, and Organization, Oxford University Press, vol. 30(4), pages 767-803.
    7. Yves Oytana & Nathalie Chappe, 2016. "Expert opinion in a tort litigation game," EconomiX Working Papers 2016-23, University of Paris Nanterre, EconomiX.
    8. Giuliana Palumbo, 2000. "Decision Rules and Optimal Delegation of Information Acquisition," CSEF Working Papers 42, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    9. Kim, Chulyoung, 2015. "Centralized vs. Decentralized Institutions for Expert Testimony," MPRA Paper 69618, University Library of Munich, Germany.
    10. Elisabetta Iossa & Giuliana Palumbo, 2007. "Information Provision and Monitoring of the Decision-Maker in the Presence of an Appeal Process," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(4), pages 657-682, December.
    11. repec:kap:ejlwec:v:46:y:2018:i:1:d:10.1007_s10657-018-9584-9 is not listed on IDEAS
    12. Yves Oytana & Nathalie Chappe, 2016. "Expert opinion in a tort litigation game," Working Papers hal-01413908, HAL.

    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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