Communication in Agencies
AbstractIn this article the value of communications structures is considered in an agency model with differential information. The optimal compensation to the agent is characterized, and it is shown that this characterization is related to the accountant's use of the budget as a motivation device. Within our framework, we discuss the relationship between the content of information systems supplied to the agent privately and the agency's well-being. It is shown that the agency is not always better off if the agent is supplied with more information, since he might use that information to shirk.
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Bibliographic InfoArticle provided by The RAND Corporation in its journal Bell Journal of Economics.
Volume (Year): 12 (1981)
Issue (Month): 2 (Autumn)
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Web page: http://www.rje.org
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- Edward S. Prescott & Robert M. Townsend, 2003. "Mechanism design and assignment models," Working Paper 03-09, Federal Reserve Bank of Richmond.
- Peter Bogetoft, 2000. "DEA and Activity Planning under Asymmetric Information," Journal of Productivity Analysis, Springer, vol. 13(1), pages 7-48, January.
- Mukherji, Arijit & Nagarajan, Nandu J., 1995. "Moral hazard and contractibility in investment decisions," Journal of Economic Behavior & Organization, Elsevier, vol. 26(3), pages 413-430, May.
- Edward S. Prescott, 1997. "The pre-commitment approach in a model of regulatory banking capital," Economic Quarterly, Federal Reserve Bank of Richmond, issue Win, pages 23-50.
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