A prisoner's dilemma model of collusion deterrence

@article{Kofman1996APD,
  title={A prisoner's dilemma model of collusion deterrence},
  author={F. Kofman and J. Lawarr{\'e}e},
  journal={Journal of Public Economics},
  year={1996},
  volume={59},
  pages={117-136}
}
Abstract We examine a hierarchy formed by a principal, a supervisor and an agent, wherein the supervisor and the agent can collude. We consider a case where collusion-free supervisors are not available. We demonstrate first that it is easy for the principal to deter collusion by introducing a second supervisor and designing a mechanism similar to the prisoner's dilemma so that the two supervisors control each other. Since it could prove too costly for the principal to send two supervisors, a… Expand
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