Mediated audits

• 成果类型: Article
• 署名作者: Pollrich, Martin
• 署名单位: Humboldt University of Berlin
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• 发表日期: 2017
• 页码: 44-68
• 关键词: Cheap talk; INFORMATION; COMMITMENT; COMMUNICATION; equilibria; insurance; FRAUD; games

摘要

I study optimal contracting where the principal can verify the agent's private information via auditing but cannot contractually commit to audit frequency. Optimal contracting requires sophisticated communication: the agent reports his information to a mediator, who randomly selects a contract. Mediation allows for fine-tuning the information flow, because the principal observes the selected contract but not the agent's report. Simply offering a menu of contracts is, in general, not optimal. I characterize optimal mediated contracts, determine conditions for when auditing is profitable, and analyze contractual distortions. Mediated contracts can be implemented via negotiated rulemaking procedures, and potentially via sequential communication.