Decentralization and Collusion

Sandeep Baliga; Tomas Sjöström

doi:10.1006/jeth.1996.2462

Decentralization and Collusion

Sandeep Baliga^*, Tomas Sjöström

^*Corresponding author for this work

Managerial Economics, Decision Sciences and Operations

Research output: Contribution to journal › Article › peer-review

63 Scopus citations

Abstract

We consider a model where agents work in sequence on a project, share information not available to the principal, and can collude. Due to limited liability the Coase theorem does not apply. The distribution of surplus among the agents is therefore an important control variable for the principal, which gives us a theory of how to delegate in an organization subject to moral hazard. The optimal distribution of surplus can always be achieved by delegating in the right way (decentralization) without using "message games."Journal of Economic LiteratureClassification Numbers: D23, D82, L14, L22.

Original language	English (US)
Pages (from-to)	196-232
Number of pages	37
Journal	Journal of Economic Theory
Volume	83
Issue number	2
DOIs	https://doi.org/10.1006/jeth.1996.2462
State	Published - Dec 1998

ASJC Scopus subject areas

Economics and Econometrics

Access to Document

10.1006/jeth.1996.2462

Fingerprint Dive into the research topics of 'Decentralization and Collusion'. Together they form a unique fingerprint.

Cite this

@article{b187c8be6fb54d7bb05326bde216a49f,

title = "Decentralization and Collusion",

abstract = "We consider a model where agents work in sequence on a project, share information not available to the principal, and can collude. Due to limited liability the Coase theorem does not apply. The distribution of surplus among the agents is therefore an important control variable for the principal, which gives us a theory of how to delegate in an organization subject to moral hazard. The optimal distribution of surplus can always be achieved by delegating in the right way (decentralization) without using {"}message games.{"}Journal of Economic LiteratureClassification Numbers: D23, D82, L14, L22.",

author = "Sandeep Baliga and Tomas Sj{\"o}str{\"o}m",

year = "1998",

month = dec,

doi = "10.1006/jeth.1996.2462",

language = "English (US)",

volume = "83",

pages = "196--232",

journal = "Journal of Economic Theory",

issn = "0022-0531",

publisher = "Academic Press Inc.",

number = "2",

}

TY - JOUR

T1 - Decentralization and Collusion

AU - Baliga, Sandeep

AU - Sjöström, Tomas

PY - 1998/12

Y1 - 1998/12

N2 - We consider a model where agents work in sequence on a project, share information not available to the principal, and can collude. Due to limited liability the Coase theorem does not apply. The distribution of surplus among the agents is therefore an important control variable for the principal, which gives us a theory of how to delegate in an organization subject to moral hazard. The optimal distribution of surplus can always be achieved by delegating in the right way (decentralization) without using "message games."Journal of Economic LiteratureClassification Numbers: D23, D82, L14, L22.

AB - We consider a model where agents work in sequence on a project, share information not available to the principal, and can collude. Due to limited liability the Coase theorem does not apply. The distribution of surplus among the agents is therefore an important control variable for the principal, which gives us a theory of how to delegate in an organization subject to moral hazard. The optimal distribution of surplus can always be achieved by delegating in the right way (decentralization) without using "message games."Journal of Economic LiteratureClassification Numbers: D23, D82, L14, L22.

UR - http://www.scopus.com/inward/record.url?scp=0009886306&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=0009886306&partnerID=8YFLogxK

U2 - 10.1006/jeth.1996.2462

DO - 10.1006/jeth.1996.2462

M3 - Article

AN - SCOPUS:0009886306

VL - 83

SP - 196

EP - 232

JO - Journal of Economic Theory

JF - Journal of Economic Theory

SN - 0022-0531

IS - 2

ER -