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Individual accountability in teams

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  • Marx, Leslie M.
  • Squintani, Francesco

Abstract

We consider a model of team production in which the principal observes only the team output, but agents can monitor one another (at a cost) and provide reports to the principal. We consider the problem faced by a principal who is prevented from penalizing an agent without evidence showing that the agent failed to complete his assigned actions. We show the first-best (high effort but no monitoring) can be achieved, but only if the principal assigns second-best actions. The principal requires monitoring, but agents do not monitor, and as long as output is high, the principal does not penalize agents who fail to monitor. If the principal has the responsibility for monitoring, the first-best outcome cannot be achieved, thus we identify an incentive for delegated monitoring even when agents have no informational advantage.

Suggested Citation

  • Marx, Leslie M. & Squintani, Francesco, 2009. "Individual accountability in teams," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 260-273, October.
    • Handle: RePEc:eee:jeborg:v:72:y:2009:i:1:p:260-273
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    Cited by:

    1. Joyee Deb & Jin Li & Arijit Mukherjee, 2015. "Relational Contracts with Subjective Peer Evaluations," Cowles Foundation Discussion Papers 1995, Cowles Foundation for Research in Economics, Yale University.
    2. Herrera, Helios & Reuben, Ernesto & Ting, Michael M., 2017. "Turf wars," Journal of Public Economics, Elsevier, vol. 152(C), pages 143-153.
    3. Joeri Sol, 2016. "Peer Evaluation: Incentives and Coworker Relations," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 25(1), pages 56-76, March.
    4. Uwe Jirjahn & Kornelius Kraft, 2010. "Teamwork And Intra‐Firm Wage Dispersion Among Blue‐Collar Workers," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(4), pages 404-429, September.
    5. Miquel-Florensa, Josepa & Joseph, George, 2022. "Motivating Public Sector Employees: Public Good Contributions in Addis Ababa Water and Sewerage Authority," TSE Working Papers 22-1336, Toulouse School of Economics (TSE).
    6. Joeri Sol, 2010. "Peer Evaluation: Incentives and Co-Worker Relations," Tinbergen Institute Discussion Papers 10-055/1, Tinbergen Institute.
    7. Ravi Bapna & Anitesh Barua & Deepa Mani & Amit Mehra, 2010. "Research Commentary ---Cooperation, Coordination, and Governance in Multisourcing: An Agenda for Analytical and Empirical Research," Information Systems Research, INFORMS, vol. 21(4), pages 785-795, December.
    8. Uwe Jirjahn & Erik Poutsma, 2013. "The Use of Performance Appraisal Systems: Evidence from Dutch Establishment Data," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 52(4), pages 801-828, October.
    9. Goldfayn, Ekaterina, 2006. "Organization of R&D With Two Agents and Principal," Bonn Econ Discussion Papers 3/2006, University of Bonn, Bonn Graduate School of Economics (BGSE).

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    More about this item

    Keywords

    Principal-agent problem Delegated monitoring Bilateral contracts;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General

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