Arbeitspapier
Regulatory Auditing and Ramsey Pricing
Truthful revelation mechanisms with auditing have the undesirable property that audits are not actually performed in equilibrium because all inference problems have been solved. A model is proposed in which the inference problem is preserved by separating the regulatory and auditing functions and transfers are costly. The auditor designs a Bayesian audit procedure and the regulator credibly commits to using this procedure in the regulatory mechanism. The auditor is conservative, that is, he does not like to make mistakes for his client. Second-best allocation is achieved over a well-defined auditing region of the regulator's prior beliefs about firm type. The auditing region is increasing in the precision of the auditing technology and is decreasing in the strength of the regulator's prior beliefs.
- Language
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Englisch
- Bibliographic citation
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Series: Queen's Economics Department Working Paper ; No. 824
- Classification
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Wirtschaft
- Event
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Geistige Schöpfung
- (who)
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Garvie, Devon
- Event
-
Veröffentlichung
- (who)
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Queen's University, Department of Economics
- (where)
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Kingston (Ontario)
- (when)
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1991
- Handle
- Last update
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10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Garvie, Devon
- Queen's University, Department of Economics
Time of origin
- 1991
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