Powered by OpenAIRE graph
Found an issue? Give us feedback
addClaim

Making Collusion Hard: Asymmetric Information as a Counter-Corruption Measure

Authors: Juan Ortner; Sylvain Chassang;

Making Collusion Hard: Asymmetric Information as a Counter-Corruption Measure

Abstract

We study the problem of a principal who relies on the reports of a monitor to provide incentives to an agent. We allow for collusion, so that the agent and monitor can side-contract on what report to send. We show that the principal can benefit from creating endogenous asymmetric information between the agent and the monitor, thereby making side-contracting more difficult. Specifically, it may be optimal to randomize the incentives given to the monitor, and let the magnitude of her incentives serve as her private information vis a vis the agent.Plausible numerical computations in simple environments suggest that the potential efficiency gains from random incentives can be large. However, in general, the optimality of random incentives will depend on patterns of pre-existing asymmetric information: it is not always effective to add new sources of asymmetric information. We solve for both the Bayesian and max-min optimal policies, as well as provide an experiment-ready framework for prior-free policy evaluation. We show that even though monitors' reports do not provide a reliable measure of actual corruption, it is possible to evaluate local policy changes using only unverified report data.

Related Organizations
  • BIP!
    Impact byBIP!
    selected citations
    These citations are derived from selected sources.
    This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
    2
    popularity
    This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
    Average
    influence
    This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
    Average
    impulse
    This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
    Average
Powered by OpenAIRE graph
Found an issue? Give us feedback
selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
2
Average
Average
Average
Upload OA version
Are you the author of this publication? Upload your Open Access version to Zenodo!
It’s fast and easy, just two clicks!