This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

External vs Internal Monitors: The Role of Restructuring Consequences and Information Technologies

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Will, Heide C. U.
Abstract

This paper analyses the relative efficiency of internal and external monitors. It confirms the intuition that, if the principal and her employees share aligned interests, internal monitoring is superior to external monitoring; vice versa if interests diverge. This result is not robust for two alternative information technologies considered. If monitoring effort affects the frequency instead of the accuracy of produced signals, the optimal monitoring mode depends on the contingency policy that is adopted in case monitoring fails. If, by contrast, the obtained signals are nonverifiable, then internal monitoring is weakly dominant.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: ftp://web.bgse.uni-bonn.de/pub/RePEc/bon/bonsfa/bonsfa576.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by University of Bonn, Germany in its series Discussion Paper Serie A with number 576.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: pages
Date of creation: Jul 1998
Date of revision:
Handle: RePEc:bon:bonsfa:576

Contact details of provider:
Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany
Fax: +49 228 73 9221
Web page: http://www.bgse.uni-bonn.de/index.php?id=517

For technical questions regarding this item, or to correct its listing, contact: (Daniel Park).

Related research
Keywords: contracts; externalities; interest alignment; monitoring;

Find related papers by JEL classification:
D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
D8 - Microeconomics - - Information, Knowledge, and Uncertainty

This paper has been announced in the following NEP Reports:

This item is featured on the following reading lists:
  1. Industrial Sociology (FCT-UNL)
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Cremer, Jacques, 1995. "Arm's Length Relationships," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 275-95, May. [Downloadable!] (restricted)
  2. Strausz, Roland, 1997. "Delegation of Monitoring in a Principal-Agent Relationship," Review of Economic Studies, Blackwell Publishing, vol. 64(3), pages 337-57, July. [Downloadable!] (restricted)
    Other versions:
Full references

Statistics
Access and download statistics

Did you know? Over 80% of the top 1000 economists are registered on RePEc.

This page was last updated on 2009-11-15.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.