Two types of collusion in a model of hierarchical agency

The standard ex post type of collusion is a supervisor-agent agreement to misrepresent the outcome of supervision. Under ex ante collusion the agent makes a side transfer to the supervisor, who, in return, stops monitoring the agent's productivity. Extending TIROLE'S [1986] model of hierarchy to include ex ante collusion and supervision costs, we show that the principal can ignore ex ante collusion and the supervisor's incentive constraint if supervision technology is likely to generate information at a low cost. To prevent ex ante collusion the principal increases the difference between the wages paid when the supervisor's report is empty and when it contains productivity evidence.


The role of intermediaries in corruption
Bayar, G (Springer Science and Business Media LLC, 2005-03-01)
The aim of the article is to examine a briber initiated corrupt transaction and the role of intermediaries in such a transaction, using a game theoretical model. Clients applying the intermediaries do so to be able to get rid of high red tape applied by the officers. They prefer using intermediary instead of offering a bribe to the officers directly since they do not know which officers are corrupt (accepts a bribe offer) and how much bribe should be given to the corrupt officers.
The scope of auctions in the presence of downstream interactions and information externalities
Koska, Ahmet Onur; Onur, Ilke; Staehler, Frank (Springer Science and Business Media LLC, 2018-10-01)
We scrutinize the scope of auctions for firm acquisitions in the presence of downstream interactions and information externalities. We show that no mechanism exists that allows an investor to acquire a low-cost firm under incomplete information: a separating auction implies adverse selection and relies substantially on commitment to allocation and transfer rules. A pooling auction serves as a commitment device against ex-post opportunistic behavior and alleviates adverse selection. It can earn the investor ...
Testing the quantity theory of money in Greece
Ozmen, E (Informa UK Limited, 2003-12-15)
This paper investigates whether the Greek data actually support the monetarist hypotheses as argued by Karfakis. The results based on both ARDL and Johansen procedures consistently suggest that money and nominal income (prices) are endogenous for the parameters of the long-run evolution of velocity (real money balances). Thus, the basic postulation of monetarism, the exogeneity of money, appears not to be supported by the Greek data.
Interim efficient auctions with interdependent valuations
Küçükşenel, Serkan (Springer Science and Business Media LLC, 2012-05-01)
We provide a characterization of interim efficient auctions and examine their properties in the presence of informational interdependent valuations. We show that buyers can be awarded the auctioned item less often than the efficient level. We also show that buyers obtain the item more often as the degree of heterogeneity in preferences increases, even though profitability of trade does not depend on the heterogeneity in preferences.
Corporate sector liability dollarization and exchange rate balance sheet effect in Turkey
Kesriyeli, Mehtap; Özmen, Erdal; Yigit, Serkan (Informa UK Limited, 2011-01-01)
In this study, we investigate the causes and balance sheet effect consequences of Liability Dollarization (LD) of nonfinancial sectors in Turkey. The dynamic panel data Generalized Method of Moments (GMM) results suggest that both sector specific and macroeconomic variables are significant in explaining the corporate sector LD. Industries appear to partially match the currency composition of their debt with their income streams. Devaluations are found to be contractionary, in terms of investments and profit...
Citation Formats
M. Bac and S. Küçükşenel, “Two types of collusion in a model of hierarchical agency,” JOURNAL OF INSTITUTIONAL AND THEORETICAL ECONOMICS-ZEITSCHRIFT FUR DIE GESAMTE STAATSWISSENSCHAFT, pp. 262–276, 2006, Accessed: 00, 2020. [Online]. Available: