AbstractThis paper investigates the agency problem with moral hazard, where the principal hires multiple agents, and can only imperfectly monitor their action choices by observing their correlated public signals. The principal will penalize any detected deviant only by firing her and other agents. The key assumption of the paper is that agents are divided into multiple distinct groups. Within each group, all its members can make the binding commitments to achieve their collusive action choices. It is shown that it may be easier to provide the agents with the incentive to make the most desired action choices when multiple groups are established than when either no group or only the grand group is established. It is also shown that in terms of uniqueness, relative performance evaluation through inter-group competition will work better than that through inter-individual competition.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. 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.
Bibliographic InfoPaper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-201.
Length: 21 pages
Date of creation: Mar 2003
Date of revision:
Contact details of provider:
Postal: Hongo 7-3-1, Bunkyo-ku, Tokyo 113-0033
Web page: http://www.cirje.e.u-tokyo.ac.jp/index.html
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-03-19 (All new papers)
- NEP-CDM-2003-03-19 (Collective Decision-Making)
- NEP-IND-2003-03-19 (Industrial Organization)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Hitoshi Matsushiima, 2006.
"Relative Performance Evaluation between Multitask Agents,"
CARF-F-067, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
- Hitoshi Matsushiima, 2006. "Relative Performance Evaluation between Multitask Agents," CIRJE F-Series CIRJE-F-419, CIRJE, Faculty of Economics, University of Tokyo.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CIRJE administrative office).
If references are entirely missing, you can add them using this form.