Distributing Awards Efficiently: More on King Solomon's Problem

We consider a multi-award generalisation of King Solomon's problem: k identical and indivisible awards should be distributed among agents, k 1) prizes efficiently in sub-game perfect equilibria without any monetary transfers in equilibrium. Finally, in the multi-awards case we relax the complete information assumption and achieve implementation of efficient allocation by iterative elimination of weakly dominated strategies, using generalisation of Olszewski's (2003) mechanism

Beneficial Collusion in Corruption Control: The Case of Nonmonetary Penalties

We analyze a corruption model where a principal seeks to control an agent’s corruption by supplementing a costless noncollusive outside detector such as the media with a collusive internal supervisor. The principal’s objective is to minimize the overall costs, made up of enforcement costs and social costs of corruption. If the penalties on the corrupt agent and a failing supervisor are nonmonetary in nature and yet the two parties can engage in monetary side-transfers, the principal may stand to benefit by allowing supervisor-agent collusion. This benefit may even prompt the principal to actively encourage collusion by hiring a dishonest supervisor in strict preference over an honest supervisor.Corruption, monitoring, collusion, bounty hunter mechanism

A Note on: Jury Size and the Free Rider Problem

This note reassesses the basic result in Mukhopadhaya (2003) that, when jurors may acquire costly signals about a defendant’s guilt, with a larger jury size the probability of reaching a correct verdict may in fact fall, contrary to the Condorcet Jury Theorem. We show that if the jurors coordinate on any one of a number of (equally plausible) asymmetric equilibria other than the symmetric equilibrium considered by Mukhopadhaya, the probability of accuracy reaches a maximum for a particular jury size and remains unchanged with larger juries, thus mitigating Mukhopadhaya’s result somewhat. However, the case for limiting the jury size a recommendation by Mukhoapdhaya gains additional grounds if one shifts the focus from maximizing the probability of reaching a correct verdict to the maximization of the overall social surplus, measured by the expected benefits of jury decisions less the expected costs of acquiring signals.jury size, free rider problem, Condorcet Jury Theorem

All-or-nothing verdict as a screening device

An adversarial model of criminal trial is considered with three verdict choices-innocent, guilty of moderate crime, and guilty of serious crime. Depending on the parties' access to evidence and initial beliefs in the courtroom about the possible crimes, the judge may agree to the defendant's request to eliminate the verdict of moderate crime from jury deliberation if the prosecution brings the charge of serious crime. Though this all-or-nothing verdict choice confers the defendant some manipulative power, it is shown that such verdict choice may also screen out an overstated charge of serious crime. Conditions are derived under which screening is effective and powerful enough to generate (ex-ante) efficiency gains

More on Phantom Bidding

A phantom bidding model is analyzed for a sale auction. The following questions are addressed: the effects of phantom bidding on overall social welfare and buyers' profits. It is shown that social welfare may increase or decrease as the auctioneer switches from the fixed reserve price policy to phantom bidding. The buyers' profits will increase whenever social welfare increases.English Auction, Phantom Bidding, Fixed/Flexible Reserve Price

Law Enforcement Costs and Legal Presumptions

We study and compare law enforcement costs under two alternative burden of proof rules with the objective of reducing crime to a target level. We show that presuming innocence rather than guilt has a cost advantage, mainly due to lower costs of preventing collusion between law enforcers and criminals. This conclusion may change if law enforcers are incorruptible or if resources to motivate corruptible law enforcers are limited. We identify the strengths and weaknesses of the two burden of proof rules in terms of components of law enforcement costs such as ``information gathering" costs, ``collusion prevention" costs, and (when the potential offender is an official) ``agent compensation" costs.

Graduated penalty scheme

Evaders of any dues such as local council tax, motor vehicle tax, tv license fees etc., if detected, can pay promptly the dues plus any fine or postpone, which usually means a larger fine, and potentially imprisonment if payments are not made in full. We provide a rationale for this graduated penalty scheme, based on criminal tracking costs. Although in conflict with the state's basic objective of deterring evasion, a graduated penalty scheme may emerge as an optimum balance between the dual objectives of deterrence and settlement delay minimization. The analysis also offers insights as to the types of citizens especially responsive to a graduated penalty scheme