Indirect Monitoring and Optimal Corruption

Corruption is a widespread phenomenon around the world. Yet, models of hierarchical agency relationships tend not to predict collusion. The paper demonstrates that allowing collusion may be optimal if the principal cannot commit to an incentive scheme once and for all. The optimal extent of corruption depends on the efficacy of the legal system. It must be risky for the guilty parties to engage in corruption in order to make it worthwile curbing it.

MoreLess

Year of publication:	1995-04
Authors:	Lambert-Mogiliansky, Ariane
Institutions:	Economics Institute for Research (SIR), Handelshögskolan i Stockholm
Subject:	Commitment \| collusion \| renegotiation

Check Google Scholar |

More access options

In German libraries (KVK)

I need help

More details

Series:	SSE/EFI Working Paper Series in Economics and Finance.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series Working Paper Series in Economics and Finance Number 52 44 pages
Classification:	D73 - Bureaucracy; Administrative Processes in Public Organizations; Corruption ; D82 - Asymmetric and Private Information ; L22 - Firm Organization and Market Structure: Markets vs. Hierarchies; Vertical Integration
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005649459