THE VALUE OF MONITORING RISK AVERSE AGENTS IN TEAMS
by
CHARLES E. HYDE
MAY 2000
Department of Economics. University of Melbourne. Melbourne Victoria 3010 Australia
ABSTRACT
Vander Veen (1995) has argued that a principal has an incentive to monitor risk averse agents engaging in team production. We show that this result rests on specific informational assumptions that are not essential to team production. Moreover, under typical team environments and contract conditions there is no benefit from monitoring of individual agents, leaving only costs for the principal. We identify an additional mechanism design problem that arises in certain team settings-the principal must determine when to make information about each agent's reported ability public to the other team members.
This mail form will be sent automatically to Department of Economics Administrative Staff and your request will be processed. Please fill in your Details below and Click On "Send Request" button when you are finished. Papers will be sent by post. |