Learning and Corruption on Monitoring Chains
AEA Papers and Proceedings
vol. 111,
May 2021
(pp. 544-48)
Abstract
"But who will guard the guardians?" I revisit this age-old question under the following assumptions: (i) guardians are devoid of ethical motives and have quasilinear preferences, (ii) guardians monitor one another through a monitoring chain, and (iii) any two consecutive guardians in the chain can bargain away "inefficient" punishments through corruptive arrangements. Under these assumptions, monitoring is impossible unless rewards or punishments are unbounded. When material incentives are bounded and local corruption is feasible, the answer to the initial question is "no one."Citation
Strulovici, Bruno. 2021. "Learning and Corruption on Monitoring Chains." AEA Papers and Proceedings, 111: 544-48. DOI: 10.1257/pandp.20211053Additional Materials
JEL Classification
- D82 Asymmetric and Private Information; Mechanism Design
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness