Do Side Payments Help? Collective Decisions and Strategic Delegation
Bard Harstad
Journal of the European Economic Association, 2008, vol. 6, issue 2-3, 468-477
Abstract:
I investigate when side payments facilitate cooperation in a context with strategic delegation. On the one hand, allowing side payments may be necessary when one party's participation constraint otherwise would be violated. On the other, with side payments each principal appoints a delegate that values the project less, because this increases her bargaining power. Reluctant agents, in turn, implement too few projects. I show that side payments are bad if the heterogeneity is small while the uncertainty and the typical value of the project are large. With a larger number of parties there may be a stalemate without side payments, but delegation becomes more strategic as well, and cooperation decreases in either case. (JEL: C78, D78, F53, H77) (c) 2008 by the European Economic Association.
JEL-codes: C78 D78 F53 H77 (search for similar items in EconPapers)
Date: 2008
References: Add references at CitEc
Citations: View citations in EconPapers (11)
Downloads: (external link)
http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1542-4774/issues link to full text (text/html)
Access to full text is restricted to subscribers.
Related works:
Working Paper: Do side payments help? Collective decisions and strategic delegation (2007) 
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:tpr:jeurec:v:6:y:2008:i:2-3:p:468-477
Access Statistics for this article
Journal of the European Economic Association is currently edited by Xavier Vives, George-Marios Angeletos, Orazio P. Attanasio, Fabio Canova and Roberto Perotti
More articles in Journal of the European Economic Association from MIT Press
Bibliographic data for series maintained by The MIT Press ().