Private and Public Control of Management
Charles Angelucci and
Martijn A. Han
SFB 649 Discussion Papers from Humboldt University, Collaborative Research Center 649
This paper investigates the design of a leniency policy to fight corporate crime. We explicitly take into account the agency problem within the firm. We model this through a three-tier hierarchy: authority, shareholder, and manager. The manager may breach the law and report evidence to the authority. The shareholder writes the managerâ€™s incentive scheme, monitors him, and possibly reports evidence to the authority. Finally, the authority designs a sanctioning/leniency policy that deters corporate crime at the lowest possible cost. The authority designs its policy trying to both (i) exacerbate agency problems within non-compliant firms and (ii) alleviate agency problems within compliant firms. We find that depending on the authorityâ€™s ability to punish the manager, the authority may wish to instigate a â€œwithin-firm race to the courthouseâ€ . We also provide comparative statics, carry a welfare analysis and discuss policy implications.
Keywords: corporate crime; white-collar crime; leniency; compliance; antitrust (search for similar items in EconPapers)
JEL-codes: K21 K42 L40 (search for similar items in EconPapers)
Pages: 40 pages
New Economics Papers: this item is included in nep-cta, nep-iue and nep-law
References: Add references at CitEc
Citations: View citations in EconPapers (6) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:hum:wpaper:sfb649dp2012-058
Access Statistics for this paper
More papers in SFB 649 Discussion Papers from Humboldt University, Collaborative Research Center 649 Contact information at EDIRC.
Bibliographic data for series maintained by RDC-Team ( this e-mail address is bad, please contact ).