Optimal enforcement policies under the threat of collusion and extortion

Ajit Mishra

    Research output: Working paperDiscussion paper

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    Abstract

    We consider a model of enforcement where the Principal relies on the Supervisor for information on the Agents. We argue that optimal policies must consider both collusion and extortion possibilities. Both collusion and extortion can be prevented by mechanisms resembling appeals process. However, if appeals involve a net cost for the agents, then optimal enforcement policy may involve over-enforcement or under-enforcement.
    Original languageEnglish
    PublisherUniversity of Dundee
    Publication statusPublished - 2005

    Publication series

    NameDundee Discussion Papers in Economics
    PublisherUniversity of Dundee
    No.184
    ISSN (Print)1473-236X

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  • Cite this

    Mishra, A. (2005). Optimal enforcement policies under the threat of collusion and extortion. (Dundee Discussion Papers in Economics; No. 184). University of Dundee.