To ensure that individual actors take certain actions, community enforcement may be required. This can present a rules-versus-discretion dilemma: It can become impossible to employ discretion based on information that is not widely held, because the wider community is unable to verify how the information was used. Instead, actions may need to conform to simple and widely verifiable rules. We st...

A dominant assumption in the street-level bureaucracy literature is that bureaucrats’ discretion curtailed by automated systems. Drawing on survey and factual data (n = 549) from Dutch inspectors, we test effect of automation enforcement style whether this can be explained discretion-as-perceived. Our results show (1) increases legal accommodation style; (2) discretion-as-perceived does not med...

We experimentally investigate a repeated “inspection game” where, in the stage game, an employee can either work or shirk and an employer simultaneously chooses to inspect or not inspect. The unique equilibrium of the stage game is in mixed strategies with positive probabilities of shirking/inspecting while combined payoffs are maximized when the employee works and the employer does not inspect...

What are the forces that influence strategic managerial decisions in the context of economic transition? In this paper, we analyse how strategic and governance forces influence the degree of discretion perceived by managers operating in the context of the transition economy of Russia. An exploratory case study provides insights about the managerial decision-making process in a transition econom...

The issue of controlling discretion in large public institutions is a crucial one in modern society, and procedural legal reforms are often viewed as one tactic of control. Using due process guarantees in juvenile courts as the substantive issue, this paper tests the utility of procedural reform in reducing discretion. Results indicate that procedural reform in the juvenile court has a quite li...

We study the design of promotions in an organization where agents belong to groups that advance their cause. Examples and applications include political groups, ethnicities, agents motivated by the work in the public sector and corruption. In an overlapping generations model, juniors compete for promotions. Seniors have two kinds of discretion: direct discretion which allows an immediate advanc...

We extend the standard agency framework to allow for complex information, trustworthiness of the principal, and incomplete contracts and show that contractual incompleteness arises endogenously when there is enough complexity and trust. Several predictions of the standard model break down in our more general construction: trust plays a crucial role in the design of optimal contracts; not all th...