The authors study the design of supervisory functions in an organization with one principal and two agents. Each agent can perform supervision activities regarding the other agent. They characterize the way the principal must structure incentive payments to avoid any collusive activity between...

After a critique of the traditional paradigms of regulation from the point of view of information economics, a canonical model of regulation under asymmetric information is developed. A survey of the main results obtained in the new economics of regulation is then provided, in particular...

This paper proposes a convenient estimation method for the empirical study of auction models. The authors focus on first-price sealed-bid and descending auctions within the private value paradigm. The method relies upon a simulated nonlinear least squares objective function appropriately...

In a public good environment with positively correlated types, we characterize optimal mechanisms when agents have private information and can enter collusive agreements. First, we prove a weak-collusion-proof principle according to which there is no restriction for the principal in offering...

We propose a theory of supervision with endogenous transaction costs. A principle delegates part of his authority to a supervisor who can acquire soft information about an agent's productivity. If the supervisor were risk-neutral, the principal would simply make the better informed supervisor...