Refining and Delegating Strategic Ability in ATL

We propose extending Alternating-time Temporal Logic (ATL) by an operator <i refines-to G> F to express that agent i can distribute its powers to a set of sub-agents G in a way which satisfies ATL condition f on the strategic ability of the coalitions they may form, possibly together with others agents. We prove the decidability of model-checking of formulas whose subformulas with this operator as the main connective have the form ...<i_m refines-to G_m> f, with no further occurrences of this operator in f.Comment: In Proceedings SR 2014, arXiv:1404.041

Managerial Incentives and Stackelberg Equilibria in Oligopoly

The paper investigates both quantity and price oligopoly games in markets with a variable number of managerial and entrepreneurial firms which defines market structure. Following Vickers (Economic Journal, 1985) which establishes an equivalence between the equilibrium under unilateral delegation and the Stackelberg quantity equilibrium, the outcomes of these games are compared with the ones in sequential multi-leaders and multi-followers games. The profitability of a managerial/entrepreneurial attitude vs leadership/followership is shown to critically depend upon the kind of strategy, price or quantity, and upon the assumed market structure. Indeed, the latter turns out to be crucial in determining the equivalence result that is shown to be contingent on the assumption that just one leader or one managerial firm operate in the market. A welfare analysis finally highlights the differences between the delegation and the sequential games, focusing on the impact of market structure and imperfect substitutability on the equilibria of the two games.Strategic delegation, sequential games, quantity and price competition, welfare analysis.

Arm’s Length Provision of Public Services

We analyze the economic consequences of strategic delegation of the right to decide between public or private provision of governmental service and/or the authority to negotiate and renegotiate with the chosen service provider. Our model encompass both bureaucratic delegation from a government to a privatization agency and electoral delegation from voters to a government. We identify two powerfull effects of delegation when contracts are incomplete: The incentive effect increases the incentive part of service providers’ remuneration and we show that strategic delegation may substitute formal incentive contracts. The bargaining effect improves the bargaining position vis a vis a private firm with market power and leads to a lower price for the service.outsourcing; strategic delegation; incentives; incomplete contracting; market power; representative democracy

Delegation and Rewards

We study experimentally whether anti-corruption policies with a focus on bribery might be insufficient to uncover more subtle ways of gaining an unfair advantage. In particular, we investigate whether an implicit agreement to exchange favors between a decision-maker and a lobbying party serves as a legal substitute for corruption. Due to the obvious lack of field data on these activities, the laboratory provides an excellent opportunity to study this question. We find that even the pure anticipation of future rewards from a lobbying party suffices to bias a decision-maker in favor of this party, even though it creates negative externalities to others. Although future rewards are not contractible, the benefitting party voluntarily compensates decision-makers for partisan choices. In this way, both receive higher payoffs, but aggregate welfare is lower than without a rewards channel. Thus, the outcome mirrors what might have been achieved via conventional bribing, while not being illegal

Auer Deference: Doubling Down on Delegation\u27s Defects

Together with the better-known Chevron deference rule, the doctrine articulated in Auer v. Robbins two decades ago—which makes reasonable administrative constructions of ambiguous administrative rules binding on courts in most circumstances—has become a focal point for concerns about the expanding administrative state. Auer deference, even more than Chevron deference, enlarges administrative authority in ways that are at odds with basic constitutional structures and due process requirements. Objections to Auer have provided cogent reasons for why courts should not grant deference to administrative interpretations merely because an agency’s rule is unclear. The most commonly voiced objections, however, do not explain why Congress should be disabled in all instances from granting administrators discretionary authority over rule interpretation—even in settings that do not raise serious risks of partiality or unfair surprise in administrative construction. Examining the relationship between statutorily directed deference and constitutional-structural principles clarifies the essential underlying objection to Auer and the limits of that objection. When Congress by law confers discretionary authority that does not exceed its constitutional power to delegate functions to an administrator, courts should respect that assignment of authority, unless it violates other specific constitutional commands. Yet, when delegations are at most only arguably consistent with the Constitution, extending deference—especially expanding deference as Auer does in successive determinations—exacerbates delegations’ difficulties. A reinvigorated nondelegation doctrine would solve the major Auer problem directly, and elimination of Auer-like deference would clearly be preferable to retaining the doctrine in its current form. Short of that, demanding that the statutory basis for deference is clearly articulated would provide a modest first step in cabining problems associated with constitutionally questionable delegations of lawmaking authority. Those who embrace the rule of law, whether advocates or opponents of the modern administrative state, should support that step

Why States Create International Tribunals: A Response to Professors Posner and Yoo

A recent article in the California Law Review by Professors Eric Posner and John Yoo, Judicial Independence in International Tribunals, argues that the only effective international tribunals are dependent tribunals, by which the authors mean ad hoc tribunals staffed by judges closely controlled by governments through the power of reappointment or threats of retaliation. Independent tribunals, by contrast, meaning tribunals staffed by judges appointed on similar terms as those in domestic courts, pose a danger to international cooperation. According to Posner and Yoo, independent tribunals are suspect because they are more likely to allow moral ideals, ideological imperatives or the interests of other states to influence their judgments. In this response, we identify the many shortcomings in the theory, methodology, and empirics in Judicial Independence in International Tribunals. We do so to challenge the authors\u27 core conjecture: that formally dependent international tribunals are correlated with effective judicial outcomes. We then offer our own counter-theory; a theory of constrained independence in which states establish independent international tribunals to enhance the credibility of their commitments and then use more fine grained structural, political, and discursive mechanisms to limit the potential for judicial excesses

Arm’s Length Provision of Public Services

We analyze the economic consequences of strategic delegation of the right to decide between public or private provision of governmental service and/or the authority to negotiate and renegotiate with the chosen service provider. Our model encompass both bureaucratic delegation from a government to a privatization agency and electoral delegation from voters to a government. We identify two powerfull effects of delegation when contracts are incomplete: The incentive effect increases the incentive part of service providers’ remuneration and we show that strategic delegation may substitute formal incentive contracts. The bargaining effect improves the bargaining position vis a vis a private firm with market power and leads to a lower price for the service.outsourcing, strategic delegation, incentives, incomplete contracting, market power, representative democracy