Decision Rules and Information Provision:Monitoring versus Manipulation

Elisabetta Iossa and Giuliana Palumbo ()

Public Policy Discussion Papers from Economics and Finance Section, School of Social Sciences, Brunel University

Abstract: The paper focuses on the organization of institutions designed to resolve disputes between two parties, when some information is not veri…able and decision makers may have vested preferences. It shows that the choice of how much discretional power to grant to the decision maker and who provides the information are intrinsically related. Direct involvement of the interested parties in the supply of information enhances monitoring over the decision maker, although at the cost of higher manipulation. Thus, it is desirable when the decision maker is granted high discretion. On the contrary, when the decision maker has limited discretional power, information provision is better assigned to an agent with no direct stake. The analysis helps to rationalize some organizational arrangements that are commonly observed in the context of judicial and antitrust decision-making.

Pages: 32 pages
Date: 2002-07
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Related works:
Working Paper: Decision Rules and Information Provision:Monitoring versus Manipulation (2002)
Working Paper: Decision rules and information provision: monitoring versus manipulation (2002)
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