Mechanism design with collusive supervision

• 成果类型: Article
• 署名作者: Celik, Gorkem
• 署名单位: University of British Columbia
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2008.02.006
• 发表日期: 2009
• 页码: 69-95
• 关键词: Collusion; supervision; DELEGATION; mechanism design

摘要

We analyze an adverse selection environment with third party supervision. The supervisor is partly informed of the agent's type. The supervisor and the agent collude while interacting with the principal. Contracting with the agent directly and ignoring the presence of the supervisor constitutes the no-supervision benchmark. We show that delegating to the supervisor reduces the principal's payoff compared to the no-supervision benchmark under a standard condition on the distribution of the agent's types. In contrast, if the principal contracts with both the agent and the supervisor, there exists a mechanism that improves the principal's payoff over the no-supervision payoff. (C) 2008 Elsevier Inc. All rights reserved.