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Two Types of Collusion in a Model of Hierarchical Agency

Mehmet Bac and Serkan Küçükşenel ()

Game Theory and Information from EconWPA

Abstract: We introduce ex-ante collusion whereby the supervisor stops monitoring for a transfer payment from the agent, in addition to ex-post collusion following the monitoring outcome. Extending a well-known model of hierarchy, we study the determinants of ex-ante collusion and show that, depending on the parameter values we identify, the principal can ignore either ex-post or ex-ante collusion.

Keywords: hierarchy; incentives; collusion (search for similar items in EconPapers)
JEL-codes: D82 L22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mic
Date: 2005-08-04
Note: Type of Document - pdf; pages: 18
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Journal Article: Two Types of Collusion in a Model of Hierarchical Agency (2006) Downloads
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