Making corruption harder: Asymmetric information, collusion, and crime

Juan Ortner, Sylvain Chassang

    Research output: Contribution to journalArticle

    Abstract

    We model criminal investigation as a principal-agent-monitor problem in which the agent can bribe the monitor to destroy evidence. Building on insights from Laffont and Martimort’s 1997 paper, we study whether the principal can profitably introduce asymmetric information between agent and monitor by randomizing the monitor’s incentives. We show that it can be the case, but the optimality of random incentives depends on unobserved preexisting patterns of private information. We provide a data-driven framework for policy evaluation requiring only unverified reports. A potential local policy change is an improvement if, everything else equal, it is associated with greater reports of crime.

    Original languageEnglish (US)
    Pages (from-to)2108-2133
    Number of pages26
    JournalJournal of Political Economy
    Volume126
    Issue number5
    DOIs
    StatePublished - Oct 1 2018

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    Asymmetric information
    Incentives
    Corruption
    Collusion
    Crime
    Private information
    Optimality
    Bribes
    Policy evaluation
    Policy change

    ASJC Scopus subject areas

    • Economics and Econometrics

    Cite this

    Making corruption harder : Asymmetric information, collusion, and crime. / Ortner, Juan; Chassang, Sylvain.

    In: Journal of Political Economy, Vol. 126, No. 5, 01.10.2018, p. 2108-2133.

    Research output: Contribution to journalArticle

    Ortner, Juan ; Chassang, Sylvain. / Making corruption harder : Asymmetric information, collusion, and crime. In: Journal of Political Economy. 2018 ; Vol. 126, No. 5. pp. 2108-2133.
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