Björn Segendorff: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, S-113 83 Stockholm, Sweden
Abstract: A separating equilibrium in which competent (incompetent) leaders choose competent (incompetent) co-workers is investigated. An outside observer rewards the leader at good policy outcomes. The incompetent co-worker can, at bad outcomes, be used as scapegoat. By assumption, the leader may fail in blaming the scapegoat. Two different assumptions on the outside observer's information set are compared. If she cannot observe a failed attempt, the separating equilibrium exists only if two non-mimicking constraints are met. If she can observe a failed attempt, an additional constraint is added due to the possibility of partial mimicking.
20 pages, June 5, 2000
Full text files
hastef0407.pdf Full text
Questions (including download problems) about the papers in this series should be directed to Helena Lundin ()
Report other problems with accessing this service to Sune Karlsson ().
This page generated on 2020-02-16 18:55:45.