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Private and Public Control of Management

54 Pages Posted: 21 Dec 2010 Last revised: 23 Jul 2012

Charles Angelucci

University of Toulouse 1 - Toulouse School of Economics (TSE)

Martijn A. Han

Humboldt University of Berlin

Date Written: July 13, 2011

Abstract

This paper investigates the design of a leniency policy to fight corporate crime. The manager may breach the law and report evidence to the authority. The shareholder writes the manager's incentive scheme and possibly reports evidence to the authority. The authority designs a leniency policy to deter fraud by both (i) exacerbating agency problems within non-compliant firms and (ii) alleviating them within compliant firms. Depending on the authority's ability to sanction the manager, it may be socially desirable to instigate a "within-firm race to the courthouse".

Keywords: Corporate crime, white-collar crime, leniency, compliance, antitrust

JEL Classification: L20, K20, K42

Suggested Citation

Angelucci, Charles and Han, Martijn A., Private and Public Control of Management (July 13, 2011). Amsterdam Center for Law & Economics Working Paper No. 2010-14. Available at SSRN: https://ssrn.com/abstract=1729135 or http://dx.doi.org/10.2139/ssrn.1729135

Charles Angelucci

University of Toulouse 1 - Toulouse School of Economics (TSE) ( email )

Place Anatole-France
Toulouse Cedex, F-31042
France

Martijn Han (Contact Author)

Humboldt University of Berlin ( email )

Unter den Linden 6
Berlin, AK Berlin 10099
Germany

HOME PAGE: http://www.martijnhan.com

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