Delegation, monitoring, and relational contracts
This paper analyzes in a relational contracting framework when a principal should fully delegate a task to a team of hired workers or only partially delegate the task and work herself in the team. It is shown that full delegation is more likely to be optimal under a less efficient monitoring technology, lower generated surplus, lower complementarity of efforts, or a larger team of workers.
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- Luis Rayo, 2007. "Relational Incentives and Moral Hazard in Teams," Review of Economic Studies, Oxford University Press, vol. 74(3), pages 937-963.
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