Optimal Enforcement Policies Under the Threat of Collusion and Extortion
We consider a model of enforcement where the Principal relies on the Supervisor for information on the Agents. We argue that optimal policies must consider both collusion and extortion possibilities. Both collusion and extortion can be prevented by mechanisms resembling appeals process. However, if appeals involve a net cost for the agents, then optimal enforcement policy may involve over-enforcement or under-enforcement.
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- Hindriks, J. & Keen, M. & Muthoo, A., 1998.
"Corruption, Extortion and Evasion,"
9809, Exeter University, Department of Economics.
- HINDRIKS, Jean & KEEN, Michael & MUTHOO, Abhinay, . "Corruption, extortion and evasion," CORE Discussion Papers RP 1671, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Hindriks, J. & Keen, M. & Muthoo, A., 1996. "Corruption, Extortion and Evasion," Papers 179, Notre-Dame de la Paix, Sciences Economiques et Sociales.
- Mookherjee, Dilip & Png, I P L, 1994. "Marginal Deterrence in Enforcement of Law," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 1039-66, October.
- Marjit, Sugata & Mukherjee, Vivekananda & Mukherjee, Arijit, 2000. "Harassment, corruption and tax policy," European Journal of Political Economy, Elsevier, vol. 16(1), pages 75-94, March.
- Laffont, J.J. & Martimort, D., 1996.
"Collusion Under Asymmetric Information,"
95.389, Toulouse - GREMAQ.
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