The not-so-secret-agent: Professional monitors, hierarchies and implementation

Sandeep Baliga ()

Review of Economic Design, 2002, vol. 7, issue 1, 17-26

Abstract: It is well-known that, when agents in an organization possess private information that is unverifiable by an outside party, games where agents simply announce their information can have multiple equilibria that may impede the successful implementation of the organization's objectives. We show that the introduction of a professional monitor (e.g. auditor, regulator, supervisor) can help to destroy the "bad'' equilibria when agents have private information but have incomplete info rmation about others' information.

Keywords: Perfect Bayesian equilibrium; implementation; incomplete information (search for similar items in EconPapers)
JEL-codes: C72 D71 D82 (search for similar items in EconPapers)
Date: 2002-09-05
Note: Received: 21 May 1998 / Accepted: 26 May 2000
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Working Paper: The Not-So-Secret Agent: Professional Monitors, Hierarchies and Implementation (1995)
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