This paper studies the optimal design of delegation rule in a three-tier principal-intermediary-agent hierarchy. In … this hierarchy, monetary transfer is not feasible, delegation is made sequentially, and all players are strategic. We … characterize the optimal delegation mechanism. It is shown that the single-interval delegation a la Holmstrom is optimal only when …

problem is to certify the private signal and make it public. When collusion between the certifier and the agent is an issue … if this certification raises the specter of collusion. …

We study the relationship between collusion and corruption in a stylized model of repeated procurement where the cost … suppliers alleviates free-riding in reporting. However, it also facilitates collusion in bidding by increasing the value of the … collusive rent. In turn, bidding collusion facilitates cooperation in reporting by increasing the value of having honest …

favoritism increases the gains from collusion and contributes to solving basic implementation problems for a cartel of bidders … favoritism greatly simplifies matters for the cartel. We thus find that favoritism generally facilitates collusion at a high cost …

delegation and show how simple indirect mechanisms can improve efficiency in a simple model of moral hazard. …

challenge. We characterize an equilibrium delegation rule with two key properties: a) some high-skilled politicians may select …