 Endogenous institutions in bureaucratic compliance gamesSilvia Fedeli and Michele Santoni Economics of Governance, 2001, vol. 2, issue 3, 203-229 Abstract: We consider a set-up where two governments have either conflicting or matching preferences on the provision of differentiated (local) goods supplied by a common monopoly bureau. We develop a two-stage game. At stage-1, the two governments decide whether or not to merge into a single institution. At stage-2, all players simultaneously and independently take their decisions in terms of production and rents, with perfect knowledge of the other players' strategies. We solve the subgame perfect Nash equilibrium of this game, and show that, if the bureau immediately updates its objective function to institutional changes, then the governments always prefer merging. However, if there is an initial bureaucratic inertia in adjusting the bureau's objective function to the institutional change, then ruling politicians may prefer decentralisation to centralisation, depending on the strategic properties of the compliance game and on their own discounting. Copyright Springer-Verlag Berlin Heidelberg 2001 Keywords: Key words: bureaucracy; common agency; repeated compliance games; JEL classification: D73 (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:spr:ecogov:v:2:y:2001:i:3:p:203-229 Ordering information: This journal article can be ordered from Access Statistics for this article Economics of Governance is currently edited by Amihai Glazer and Marko Koethenbuerger More articles in Economics of Governance from Springer |
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