Relational enforcement

• 成果类型: Article
• 署名作者: Achim, Peter; Knoepfle, Jan
• 署名单位: University of York - UK; University of London; Queen Mary University London
• 刊物名称: THEORETICAL ECONOMICS
• ISSN/ISSBN: 1933-6837
• DOI: 10.3982/TE5183
• 发表日期: 2024-05-01
• 页码: 823-863
• 关键词: Relational contracts; dynamic enforcement; persistence; costly inspections; C73; D83

摘要

A principal incentivizes an agent to maintain compliance and to truthfully announce any breaches of compliance. Compliance is imperfectly controlled by the agent's private effort choices, is partially persistent, and is verifiable by the principal only through costly inspections. We show that in principal-optimal equilibria, the principal enforces maximum compliance using deterministic inspections. Periodic inspection cycles are suspended during periods of self-reported noncompliance, during which the agent is fined. We show how commitment to random inspections would benefit the principal, and discuss possible ways for the principal to overcome her commitment problem.