Collusion in a three-tier hierarchy: Credible beliefs and pure self-interest

Frascatore, Mark R.

doi:10.1016/s0167-2681(97)00079-6

Cited by 6 publications

(4 citation statements)

References 8 publications

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“…While joint and several liability appears to have the potential to increase regulatory compliance in catch share systems, the regulator must ensure that the cooperatives have incentives to implement and enforce an effective internal compliance regime (Frascatore, ). In a cooperative where no member has an interest in having strict internal rules enforced (e.g., if they all expect large benefits from non‐compliance), then the cooperative as an entity has little incentive to implement such compliance regime.…”

Section: Discussionmentioning

confidence: 99%

“…Social capital can improve behavioural norms and is therefore an important factor in the analysis of the role played by the joint and several liability mechanism in enhancing (or potentially undermining) regulatory compliance. The regulator must also consider the possibility of collusion between the cooperative and its members, that is strategic behaviour to evade regulations (Frascatore, ). To address this issue, the regulator has the option to impose monitoring and enforcement duties on the cooperatives to deter collusion and consolidate the overall compliance regime (Arlen, ).…”

Section: Introductionmentioning

confidence: 99%

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Incentive effect of joint and several liability in fishery cooperatives on regulatory compliance

et al. 2019

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Cooperative‐based catch share systems can be implemented such that the members of the same fishery cooperative are jointly and severally liable for not exceeding collectively assigned fishing rights. In practice, this means that a regulator can take away catch privileges from an entire cooperative that overruns its collective quota, effectively creating a penalty much larger than what could be recovered with an individual fine. Fishery cooperatives then typically implement their own internal compliance regime that includes monitoring and penalties. This article first reviews compliance practice in cooperative‐based catch share systems by examining the commonalities and differences in the way compliance regimes are structured (observation and reporting requirements, penalty scheme, internal enforcement authority and indemnification mechanisms) in a number of internal agreements from fishery cooperatives in North America and in Europe. Based on our review of cooperatives and the literature on compliance, we discuss how incentives to comply may be different for an individual fisherman operating in a fishery cooperative where joint and several liability applies as compared to an individual fishing quota baseline situation without fishery cooperative. Our review suggests that, from the regulators’ point of view, joint and several liability can increase the level of compliance for a given enforcement expenditure. However, the regulator cannot rely solely on cooperatives to carry out controls and must ensure that the cooperatives themselves have an interest in setting up an effective monitoring system and will enforce sanctions within the cooperative.

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Incentive effect of joint and several liability in fishery cooperatives on regulatory compliance

et al. 2019

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“…10 But additionally, to the possible noise between the punisher and the defector in peer punishment, institutional punishment can suffer from noise and information asymmetries between the principal (the citizens) and the agent (the politicians being the institutional punisher). 11 Monitoring of other actors' behavior is more difficult in larger groups 12 as transparency is likely to decrease. Lack of transparency also decreases the citizens' readiness for public goods contribution and to support the government.…”

Section: Disappearance Of Punishment In Large Groupsmentioning

confidence: 99%

The Absence of Policing and the Political Economy of Contribution and Defection

Toelstede

2020

Democracy and Security

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Punishment is crucial to maintain contribution and to prevent defection in societies. Previous research has shown in small groups that cooperation drops (defection rises) and rises (defection drops) immediately when punishment disappears and reappears. I will discuss this effect for large groups (societies), real-world environment in the form of the absence of policing. On the contrary to small group experiments, there are contribution delays and defection delays following punishment disappearance and reappearance. The length of these delays varies and seems to depend on aspects like trust, transparency, media-behavior, or democratic affection. All these aspects have politico-economic implications.

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“…Now, the researches of collusion mainly focus on the framework of principal-agent theory and follow a basic paradigm which uses the principal-agent model to analyze the organization structure and operation mechanism [1]. Frascatore considered the collusion between supervisor and agent in the three layers of organization structure which contained principal, supervisor and agent [2]. Bac further discussed the influence of collusionon supervise cost in the same structure [3].…”

Section: Introductionmentioning

confidence: 99%

Research of the Game and Countermeasure about Collusion between Executives of State-Owned Enterprises and Government Officials

Quan¹,

Liu²

2015

JSSM

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In recent years, the cases which the executives of state-owned enterprise and government officials, internal staff, the third party audit institutions to realize the conspiracy for acquiring enterprise assets or increase their welfare are increasing in China. For maximizing their economic interests, executives of state-owned enterprise and government officials often conspire to obtain extra gains under asymmetric information. This article first analyses the stakeholders of state-owned enterprise in China, and sets up a game model about collusion between the executives of state-owned enterprise and government officials in order to obtain the condition of the collusion. And then, the paper focuses on the trilateral game model of executives of state-owned enterprise, government officials and commission for discipline inspection and puts forward discipline inspection strategy to overcome the collusion problem. The study results show that commission for discipline inspection can effectively reduce collusion motivation by enhancing the supervision success rate, reducing the examination costs, and increasing the punishment force.

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Collusion in a three-tier hierarchy: Credible beliefs and pure self-interest

Cited by 6 publications

References 8 publications

Incentive effect of joint and several liability in fishery cooperatives on regulatory compliance

Incentive effect of joint and several liability in fishery cooperatives on regulatory compliance

The Absence of Policing and the Political Economy of Contribution and Defection

Research of the Game and Countermeasure about Collusion between Executives of State-Owned Enterprises and Government Officials

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