How an ineffective agent can increase his budget

Kimiko Terai and Amihai Glazer

Economics and Politics, 2021, vol. 33, issue 1, 133-147

Abstract: A principal aware that an agent exerts little effort will nevertheless fund the agent, because the principal values the output the agent produces. The agent in turn decides how hard to work by anticipating how his behavior affects the budget the principal will give him. Under some conditions, the principal gives the agent large budgets anticipating that the agent will not work hard. The corrupt environment aggravates the problem. An agent who can set the budget ameliorates the problem, though incompletely.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/ecpo.12162

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:ecopol:v:33:y:2021:i:1:p:133-147

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0954-1985

Access Statistics for this article

Economics and Politics is currently edited by Peter Rosendorff

More articles in Economics and Politics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().