Choosing Agents and Monitoring Consumption

A Note on Wealth as a Corruption‐Controlling Device

Bibliographic Data

ID9704061
AuthorsRafael Di Tella (Harvard Business School), Federico Weinschelbaum (0000-0002-4008-1787, University of San Andrés)
Year2008
Volume118
Issue532
Pages1552-1571
Publication date2008-10-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2008.02180.x
OpenAlexW2017621605
LanguageEN
Citations received5
References cited21

There are a large number of cases where corruption has been discovered when investigating levels of consumption that appear to be hard to justify. The informativeness of an agent's level of consumption depends on his legal income and initial level of wealth, as conspicuous consumption by wealthy agents leads to little updating of the principal's belief about their honesty. This introduces a tendency to prefer poor agents as they are easier to monitor. More generally, we describe the basic problem of choosing agents and monitoring consumption with the aim of reducing corruption, and discuss features of the practical applications. Copyright © The Author(s). Journal compilation © Royal Economic Society 2008

Computer security · Consumption (sociology · Economics · Honesty · Language change · Microeconomics · Political science · Principal (computer security · Public economics · Sociology · Computer Science · Corruption and Economic Development · Experimental Behavioral Economics Studies · Law · Law, Economics, and Judicial Systems