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Preventing collusion through discretion

Felli, Leonardo and Hortala-Vallve, R. (1996) Preventing collusion through discretion. TE/1996/303. Suntory and Toyota International Centres for Economics and Related Disciplines, London School of Economics and Poltical Science, London, UK.

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Large public bureaucracies are usually less efficient than modern private corporations. This paper explains how the degree of discretionary power might account for this difference in efficiency. In fact, increasing the discretionary power of the intermediate layers of an organization can enhance productivity by preventing collusion between middle managers and line workers; provided that collusion has a negative effect on the organization's surplus and takes place in conditions of asymmetric information

Item Type: Monograph (Discussion Paper)
Official URL:
Additional Information: © 1996 Leonardo Felli
Library of Congress subject classification: H Social Sciences > HD Industries. Land use. Labor
Sets: Research centres and groups > Financial Markets Group (FMG)
Collections > Economists Online
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Departments > Economics
Collections > LSE Financial Markets Group (FMG) Working Papers
Identification Number: TE/1996/303
Date Deposited: 28 Feb 2008

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