Collusion and Selective Supervision
This paper studies the role of a policy of inducing in combating collusion within organizations, or in regulatory setups. In a mechanism-design problem involving a principal-supervisor-agent we show the role of endogenous selection of supervisory activity by the principal. One simple example is a mechanism in which the agent bypasses the supervisor and contracts directly with the principal in some states of the world. If collusion between supervisor and agent can occur only after they have decided to participate in the mechanism, this can costlessly eliminate collusion. This result is robust to alternative information structures, collusive behaviors and specification of agent's types. Applications include self-reporting of crimes, tax amnesties, immigration amnesties, work contracts specifying di¤erent degrees of discretion, mechanisms based on recommendation letters, embassies issuing immigration permits, and hiring committees.
|Date of creation:||2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +39 +49 8274210
Fax: +39 +49 827.4211
Web page: http://www.decon.unipd.it/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:pad:wpaper:0093. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Raffaele Dei Campielisi)
If references are entirely missing, you can add them using this form.