Making corruption harder: asymmetric information, collusion, and crime
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Accepted manuscript
Date
DOI
Authors
Ortner, Juan
Chassang, Sylvain
Version
OA Version
Citation
J Ortner, S Chassang. "Making Corruption Harder: Asymmetric Information, Collusion, and Crime." Journal of Political Economy. (forthcoming) https://doi.org/10.1086/699188
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 (1997) we study whether the principal can profitably introduce asymmetric
information between agent and monitor by randomizing the monitor’s incentives. We
show it can be the case, but the optimality of random incentives depends on unobserved
pre-existing 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.