Mechanism design with collusive supervision: a three-tier agency model with a continuum of types

Yutaka Suzuki ()
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Yutaka Suzuki: Faculty of Economics, Hosei University

Economics Bulletin, 2008, vol. 4, issue 12, pages 1-10

Abstract: We apply the "Monotone Comparative Statics" method ala Topkis (1978), Edlin and Shannon (1998), and Milgrom and Segal (2002)'s generalized envelope theorem to the three-tier agency model with hidden information and collusion ala Tirole (1986, 1992), thereby provide a framework that can address the issues treated in the existing literature, e.g., Kofman and Lawarree (1993)'s auditing application, in a much simpler fashion. In addition to such a technical contribution, the paper derives some clear and robust implication applicable to corporate governance reform (Propositions 1 (2) and 3).

Keywords: Mechanism Design; Collusion; Supervision; Monotone Comparative Statics; Corporate Governance (search for similar items in EconPapers)
JEL-codes: D8 (search for similar items in EconPapers)
Date: 2008-05-16
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