Secret Contracts for Efficient Partnerships
AbstractBy allocating di erent information to team members, secret contracts can provide better incentives to perform with an intuitive organizational design. For instance, they may help to monitor monitors, and appoint secret principals. Generally, secret contracts highlight a rich duality between detection and enforcement with linear transfers. On the one hand, disobedient deviations must be detectable to enforce a given outcome, but di erent behavior may be used to detect di erent deviations. On the other hand, disobedient deviations must be attributable, i.e., some individual can be identi ed as innocent, to provide incentives with budget balance.
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Bibliographic InfoPaper provided by David K. Levine in its series Levine's Working Paper Archive with number 122247000000002236.
Date of creation: 12 Jun 2008
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Other versions of this item:
- David Rahman & Ichiro Obara, 2008. "Secret Contracts for Efficient Partnerships," Working Papers 2008-3, University of Minnesota, Department of Economics, revised 06 2008.
- David Rahman & Ichiro Obara, 2007. "Secret Contracts for Efficient Partnerships," Levine's Bibliography 321307000000000934, UCLA Department of Economics.
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-06-21 (All new papers)
- NEP-BEC-2008-06-21 (Business Economics)
- NEP-CTA-2008-06-21 (Contract Theory & Applications)
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