IDEAS home Printed from https://ideas.repec.org/p/zbw/sfb649/sfb649dp2012-058.html
   My bibliography  Save this paper

Private and public control of management

Author

Listed:
  • Angelucci, Charles
  • Han, Martijn A.

Abstract

This paper investigates the design of a leniency policy to fight corporate crime. We explicitly take into account the agency problem within the firm. We model this through a three-tier hierarchy: authority, shareholder, and manager. The manager may breach the law and report evidence to the authority. The shareholder writes the manager's incentive scheme, monitors him, and possibly reports evidence to the authority. Finally, the authority designs a sanctioning/leniency policy that deters corporate crime at the lowest possible cost. The authority designs its policy trying to both (i) exacerbate agency problems within non-compliant firms and (ii) alleviate agency problems within compliant firms. We find that depending on the authority's ability to punish the manager, the authority may wish to instigate a within-firm race to the courthouse. We also provide comparative statics, carry a welfare analysis and discuss policy implications.

Suggested Citation

  • Angelucci, Charles & Han, Martijn A., 2012. "Private and public control of management," SFB 649 Discussion Papers 2012-058, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    • Handle: RePEc:zbw:sfb649:sfb649dp2012-058
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/79607/1/728314002.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Argenton, C. & van Damme, E.E.C., 2014. "Optimal Deterrence of Illegal Behavior Under Imperfect Corporate Governance," Discussion Paper 2014-078, Tilburg University, Center for Economic Research.
    2. Angelucci, Charles & Russo, Antonio, 2012. "Moral Hazard in Hierarchies and Soft Information," TSE Working Papers 12-343, Toulouse School of Economics (TSE).
    3. Leslie M. Marx & Claudio Mezzetti & Robert C. Marshall, 2015. "Antitrust Leniency with Multiproduct Colluders," American Economic Journal: Microeconomics, American Economic Association, vol. 7(3), pages 205-240, August.
    4. Sergiu-Vlad Stan & Marius-Anton Stupar, 2020. "The Public Management Reform in Romania," Logos Universalitate Mentalitate Educatie Noutate - Sectiunea Stiinte Economice si Administrative/ Logos Universality Mentality Education Novelty - Section: Economical and Administrative Sciences, Editura Lumen, Department of Economics, vol. 5(1), pages 30-37, May.
    5. Catarina Marvão & Giancarlo Spagnolo, 2018. "Cartels and leniency: Taking stock of what we learnt," Chapters, in: Luis C. Corchón & Marco A. Marini (ed.), Handbook of Game Theory and Industrial Organization, Volume II, chapter 4, pages 57-90, Edward Elgar Publishing.

    More about this item

    Keywords

    corporate crime; white-collar crime; leniency; compliance; antitrust;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:sfb649:sfb649dp2012-058. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/sohubde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.