Skip Navigation


Journal of Law, Economics, and Organization Advance Access first published online on January 16, 2009
This version published online on February 6, 2009
Journal of Law, Economics, and Organization, doi:10.1093/jleo/ewn025
This Article
Right arrow Full Text
Right arrow Full Text (PDF)
Right arrow All Versions of this Article:
ewn025v2    most recent
ewn025v1
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Vafaï, K.
Right arrow Search for Related Content
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

© The Author 2009. Published by Oxford University Press on behalf of Yale University. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

Opportunism in Organizations

Kouroche Vafaï*

Université Paris Descartes and Université Paris 1 Panthéon-Sorbonne, CES

* Département GEA and LIRAES, Université Paris Descartes, IUT de Paris. Email: kouroche.vafai{at}libertysurf.fr.

This article characterizes the incentive contracts that optimally immunize an organization against the opportunistic activities of its members. We analyze an agency relationship with moral hazard where a principal relies on a supervisor to obtain verifiable information about an agent's output. The supervisor's discretion allows him to engage in two types of individual opportunism, namely abuse of power and abuse of authority, as well as two types of group opportunism, namely collusion with the agent and collusion with the principal. Individual opportunism occurs when the supervisor asks a tribute to reveal information, whereas group opportunism occurs when the supervisor receives a bribe to conceal information. We find that the effective, and hence most noxious, form of opportunism is individual opportunism and derive the opportunism-proof contracts, that is, the optimal contracts that protect the organization against both individual and group opportunism.

"The essence of an organization is limitation of the autonomy of all its members or parts, since all are subject to power from the others ..." (Hickson et al. 1971: 217).

"Corruption in general is harmful to economic, political, and organizational development. But all forms of corruption are not created equal. Some forms are more harmful than others" (Klitgaard 1988: 46).

The full text has been corrected to match the PDF.


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?




Disclaimer: Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.