the colluding parties offers a side contract to the other one. We develop a methodology to analyze collusion as an … dominant-strategy implementation of the optimal contract without collusion is collusion proof. In the second part of the paper … assume that the collusion offer includes a punishment strategy, to be used whenever the other agent rejects the side contract …

principal's offer; the dominant-strategy implementation of the optimal contract without collusion is collusion proof. Second, we … strategy, to be used whenever the other agent rejects the side contract. We establish the conditions that have to be satisfied … for a contract to be collusion proof and we show that the optimal contract without collusion is no longer collusion proof …

two-period contract with termination at the end of the first period. By comparing the two hierarchies -- ¡°bank-firm¡± and …, which the collusive bank can extract, and makes it more costly for the government to implement this contract. However … other equilibrium where she sticks to her commitment and excludes collusion from the contract relationship. Here, collusion …

show that while full alignment of interests combined with delegation of authority is feasible, it is never optimal. The … optimal contract is 'bang-bang'---in one region of the state space, full alignment takes place, in the other, no alignment …

delegation. The questions that we ask are which decision makers choose to delegate, and to whom they delegate. In situations … involving public goods, we characterize the decision makers who will strictly prefer to delegate, and show that when delegation …