Optimal Contract with Random Auditing.

In a model a la Baron and Myerson (1982), we revisit the question of regulating a firm under asymmetric information concerning the production cost when the principal has access to a costly monitoring procedure. Our analysis gives quite different results from the existing literature. We show that the audit policy comes from a trade-off between paying the rent to the agent paying the cost of monitoring.

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Year of publication:	1999
Authors:	Fagart, M.-C. ; Souam, S.
Subject:	REGULATION \| ASYMETRIC INFORMATION \| AUDITING

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Type of publication:	Book / Working Paper
Notes:	36 pages
Classification:	D82 - Asymmetric and Private Information ; L43 - Legal Monopolies and Regulation or Deregulation
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005486763