Two Types of Collusion in a Model of Hierarchical Agency
Bibliographic Data
| ID | 24049432 |
|---|---|
| Authors | Mehmet Bac (0000-0002-7067-9982), Serkan Kucuksenel (0000-0002-6703-1157) |
| Year | 2006 |
| Volume | 162 |
| Issue | 2 |
| Pages | 262-276 |
| Publication date | 2006-01-01 |
| Open Access | No |
| Type | ARTICLE |
| Venue | Journal of Institutional and Theoretical Economics JITE (JOURNAL) |
| Journal identifiers | ISSN: 0932-4569 • E-ISSN: 1614-0559 |
| Publisher | Mohr Siebeck (PUBLISHER) |
| DOI | 10.1628/093245606777583585 |
| OpenAlex | W1540940640 |
| Language | EN |
| Citations received | 3 |
The standard ex post type of collusion is a supervisor-agent agreement to misrepresent the outcome of supervision. Under ex ante collusion the agent makes a side transfer to the supervisor, who, in return, stops monitoring the agent's productivity. Extending Tirole's [1986] model of hierarchy to include ex ante collusion and supervision costs, we show that the principal can ignore ex ante collusion and the supervisor's incentive constraint if supervision technology is likely to generate information at a low cost. To prevent ex ante collusion the principal increases the difference between the wages paid when the supervisor's report is empty and when it contains productivity evidence.
Agency (philosophy) · Business · Collusion · Computer security · Econometrics · Economics · Ex-ante · Hierarchy · Macroeconomics · Microeconomics · Outcome (game theory) · Principal (computer security) · Supervisor · Auction Theory and Applications · Computer Science · Corporate Finance and Governance · Game Theory and Applications
| Citations per year | 3 |
|---|---|
| Citation span | 2025 - 2026 (2) |
| Highly cited | No |