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We construct a simple three-tier agency model, which is an extension of the familiar screening (self selection) models and can be placed in line with the collusion literature à la Tirole (1986, 1992), including Kofman and Lawarree (1993)'s auditing application. The basic trade-off consists of the discrete reduction in information rent vs. the improvement of marginal incentives (outputs), and thus we have "Efficiency at the top" and "Downward distortion at the bottom" at the optimum. Then, wedoi:10.15002/00007859 fatcat:chghxhhdevhyjn6bxntjlmbqre