Optimal Auditing Under Intermediated Contracting

Wolfgang Gick ()

Microeconomics from EconWPA

Abstract: This paper builds on Faure-Grimaud and Martimort’s [Economics Letters 71 (2001) 75-82] analysis of intermediated contracting. I argue that intermediated contracting permits one form of auditing, in which the sub-contract offered to the firm is examined, contingent on the intermediary’s report. Auditing reduces the intermediary’s rent and increases allocative efficiency.

Keywords: Intermediated Contracting; Grand Contract; Optimal Auditing. (search for similar items in EconPapers)
JEL-codes: D73 D82 L51 (search for similar items in EconPapers)
Date: 2004-11-18
Note: Type of Document - pdf; pages: 7
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpmi:0411003

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