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Collusion and delegation under information control

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  • Asseyer, Andreas

Abstract

This paper studies how information control affects incentives for collusion and optimal organizational structures in principal-supervisor-agent relationships. I consider a model in which the principal designs the supervisor's signal on the productive agent's private information and the supervisor and agent may collude. I show that the principal optimally delegates the interaction with the agent to the supervisor if either the supervisor's budget is large or the value of production is small. The principal prefers direct communication with the supervisor and agent if the supervisor's budget is sufficiently small and the value of production is high.

Suggested Citation

  • Asseyer, Andreas, 2020. "Collusion and delegation under information control," Discussion Papers 2020/3, Free University Berlin, School of Business & Economics.
    • Handle: RePEc:zbw:fubsbe:20203
    DOI: 10.17169/refubium-26337
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    Cited by:

    1. Jacopo Bizzotto & Alessandro De Chiara, 2022. "Frequent audits and honest audits," Working Papers 202202, Oslo Metropolitan University, Oslo Business School.
    2. von Negenborn, Colin & Pollrich, Martin, 2020. "Sweet lemons: Mitigating collusion in organizations," Journal of Economic Theory, Elsevier, vol. 189(C).
    3. Mookherjee, Dilip & Tsumagari, Masatoshi, 2023. "Regulatory mechanism design with extortionary collusion," Journal of Economic Theory, Elsevier, vol. 208(C).
    4. Asseyer, Andreas, 2020. "Collusion and delegation under information control," Theoretical Economics, Econometric Society, vol. 15(4), November.
    5. Adam, Marc Christopher, 2020. "Liquidating bankers' acceptances: International crisis, doctrinal conflict and American exceptionalism in the Federal Reserve 1913-1932," Discussion Papers 2020/4, Free University Berlin, School of Business & Economics.

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    More about this item

    Keywords

    Collusion; Information design; Delegation;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • M55 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Contracting Devices

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