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Monitoring with career concerns

Author

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  • Iván Marinovic
  • Martin Szydlowski

Abstract

We study monitoring in a continuous‐time career concerns model. A monitor oversees an agent and generates verifiable evidence if the agent shirks. The monitor's ability is uncertain and requires costly investment to maintain. Unpunished shirking reveals that the monitor is ineffective, which discourages the monitor from maintaining her ability. The agent shirks strategically to discourage the monitor, because shirking increases the rate of learning. Term limits reduce the incentive to shirk and long‐serving monitors accept bribes to hide evidence.

Suggested Citation

  • Iván Marinovic & Martin Szydlowski, 2022. "Monitoring with career concerns," RAND Journal of Economics, RAND Corporation, vol. 53(2), pages 404-428, June.
    • Handle: RePEc:bla:randje:v:53:y:2022:i:2:p:404-428
    DOI: 10.1111/1756-2171.12412
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