Supervisory efficiency and collusion in a multiple-agent hierarchy
نویسندگان
چکیده
We analyze a principal-supervisor-two-agent hierarchy with inefficient supervision. The supervisor may collect an incorrect signal on the agents' effort levels. When reporting to principal, collude one or both agents manipulate in exchange for bribe. In hierarchy, we identify new trade-off between supervision and supervisor-agent collusion: Due supervisory signal, truthfully under collusion proofness mistakenly punish agents. As result, allowing certain type of helps correct provides higher incentive work. characterize optimal no-supervision, collusion-proof, collusive-supervision contracts, show that contract dominates others when efficiency is at intermediate level.
منابع مشابه
Collusion, efficiency, and dominant strategies
Green and Laffont [1] have proven that no collusion-resilient dominant-strategy mechanism guarantees efficiency in multi-unit auctions if a player is allowed to report only a single valuation. Chen and Micali [2] have bypassed this impossibility by slightly enlarging the strategy spaces, but via mechanisms that can impose impractically high fines. For unrestricted combinatorial auctions, the po...
متن کاملOn the design of organization and collusion in the hierarchy
The performance of an organization is affected by its structure. There are many branches in a firm, and how they can move in order is the task of the design of an organization. Firm as a multicontract organization should be designed as a hierarchy. But in the multi-layer organization, asymmetric information causes a new agency problem-collusion.
متن کاملStackelberg Beats Cournot: on Collusion and Efficiency in Experimental Markets*
We report on an experiment designed to compare Stackelberg and Cournot duopoly markets with quantity competition. We implement both a random matching and a fixed-pairs version for each market. Stackelberg markets yield, regardless of the matching scheme, higher outputs than Cournot markets and, thus, higher efficiency. For Cournot markets, we replicate a pattern known from previous experiments....
متن کاملGeneric efficiency and collusion-proofness in exchange economies
The purpose of this paper is to study the kind of e‰cient allocations that can be achieved in exchange economies with asymmetric information, by means of a decentralized mechanism robust to coalitional, strategic deviations. To this end, we define a new strategic equilibrium concept – called strong collusion-proof contract – designed to characterize stable communication agreements in games with...
متن کاملCollusion and Renegotiation in Principal-Supervisor-Agent Models∗
We aim at examining the interactions between collusion and renegotiation in a principal-supervisor-agent framework, in which the supervisor and agent can collude while the principal can subsequently renegotiate. Despite common sense and the findings in the literature that collusion and renegotiation are usually costly when considered separately, we find that they play a weakly positive role whe...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: Games and Economic Behavior
سال: 2021
ISSN: ['0899-8256', '1090-2473']
DOI: https://doi.org/10.1016/j.geb.2021.09.003