Claar, Victor V (1997): An Incentive-Compatibility Approach to the Problem of Monitoring a Bureau. Published in: Public Finance Review , Vol. 26, No. 6 (November 1998): pp. 599-610.
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An incentive-compatibility framework for regulating a monopolist with unknown costs is applied to the sponsor’s problem of monitoring a bureau. Following Mueller (1989), the bureau does not make take-it-or-leave-it budget proposals to the sponsor. Rather, the bureau must announce a marginal cost per unit of output to the sponsor. Given that report, the sponsor chooses a price that it will pay to the bureau for each unit of output, and the sponsor chooses the level of output as well. The analysis reveals the price per unit of output that the sponsor must pay to the bureau to maximize social welfare.
|Item Type:||MPRA Paper|
|Original Title:||An Incentive-Compatibility Approach to the Problem of Monitoring a Bureau|
|Keywords:||Bureaucracy; Administrative Processes in Public Organizations; Corruption; Asymmetric and Private Information; Incentive Compatibility; Monitoring|
|Subjects:||D - Microeconomics > D7 - Analysis of Collective Decision-Making > D73 - Bureaucracy ; Administrative Processes in Public Organizations ; Corruption
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information ; Mechanism Design
|Depositing User:||Victor Claar|
|Date Deposited:||24. Mar 2009 05:14|
|Last Modified:||18. Feb 2013 17:07|
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