Collusion and Outcome Equivalency

Dongsoo Shin ()

Journal of Institutional and Theoretical Economics (JITE), 2008, vol. 164, issue 3, 449-459

Abstract: This paper considers a principal-agent model with adverse selection, in which collusion among the agents is possible. We compare the optimal outcome in two cases: (i) the principal can perfectly discriminate the transfers to the agents, and (ii) the principal's power to discriminate the transfers to the agents is limited. We find that the principal's payoff is not affected by limitation on transfer discrimination.

JEL-codes: D82 L23 (search for similar items in EconPapers)
Date: 2008
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