Collusion and Outcome Equivalency

This paper considers a principal-agent model with adverse selection, in which collusion among the agents is possible. We compare the optimal outcome in two cases: (i) the principal can perfectly discriminate the transfers to the agents, and (ii) the principal's power to discriminate the transfers to the agents is limited. We find that the principal's payoff is not affected by limitation on transfer discrimination.

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Year of publication:	2008
Authors:	Shin, Dongsoo
Published in:	Journal of Institutional and Theoretical Economics (JITE). - ISSN 0932-4569. - Vol. 164.2008, 3, p. 449-459

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Extent:	text/html
Type of publication:	Article
Classification:	D82 - Asymmetric and Private Information ; L23 - Organization of Production
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005582037