@article{a603dabf68e947e1a9558f269be87445,
title = "How an ineffective agent can increase his budget",
abstract = "A principal aware that an agent exerts little effort will nevertheless fund the agent, because the principal values the output the agent produces. The agent in turn decides how hard to work by anticipating how his behavior affects the budget the principal will give him. Under some conditions, the principal gives the agent large budgets anticipating that the agent will not work hard. The corrupt environment aggravates the problem. An agent who can set the budget ameliorates the problem, though incompletely.",
keywords = "budget, construction industry, corruption, effort, investment",
author = "Kimiko Terai and Amihai Glazer",
note = "Funding Information: The authors are grateful to the editor and two reviewers for their helpful comments and thank the Program in Corporate Welfare at the University of California‐Irvine for its support. We also greatly value the comments and discussions by participants at workshops at the Max Planck Institute for Tax Law and Public Finance, Osaka University, and Keio University. This work was supported by the Grants‐in‐Aid for Scientific Research (A) (24243042, 15H01952), the Grants‐in‐Aid for Scientific Research (B) (26285059, 26285065), and the Grants‐in‐Aid for Scientific Research (C) (26380370) from Japan Society for the Promotion of Science. Publisher Copyright: {\textcopyright} 2020 John Wiley & Sons Ltd",
year = "2021",
month = mar,
doi = "10.1111/ecpo.12162",
language = "English",
volume = "33",
pages = "133--147",
journal = "Economics and Politics",
issn = "0954-1985",
publisher = "Wiley-Blackwell",
number = "1",
}