Abstract
This paper demonstrates that ex post bailouts prompted by a noncontractible signal of output can lead to ex ante tacit collusion. The possibility of being bailed out whenever they fail can decrease the incentives of agents to do a good job in the first place.
Full Citation
.
“Bailouts and Unwanted Coordination.”
Journal of Accounting, Auditing, and Finance
vol.
21
,
(January 01, 2006):
109
-117
.