Collusion and Discrimination in Organizations: Comment
نویسنده
چکیده
Ishiguro(2004) shows that discriminatory wage schemes are optimal among collusion-proof contracts under relative performance evaluation when agents collude. However, that analysis depends on the assumption that the agents cannot observe their performances. We investigate how optimal contracts should be modified when the agents observe the realized firm value. We show that the optimal collusion-proof contract can be a low-powered incentive scheme with buy-out options under some circumstances. Also, this suggests the frequent use of options in wage scheme as an optimal response to collusion.
منابع مشابه
Collusion and discrimination in organizations
In a principal–multi-agent setting we investigate how optimal contracts should be modified under relative performance evaluation when agents collude. Agents may write side-contracts, which are not contingent on their effort choices but indirectly control them through sidetransfers. We show that the optimal collusion-proof contract is to introduce a ‘‘discriminatory policy’’ in the sense that th...
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