Two Types of Collusion in a Model of Hierarchical Agency
Mehmet Bac and
Serkan Küçükşenel ()
Game Theory and Information from University Library of Munich, Germany
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)
Pages: 18 pages
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Note: Type of Document - pdf; pages: 18
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Journal Article: Two Types of Collusion in a Model of Hierarchical Agency (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpga:0508001
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