Individual accountability in teams
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.
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.:
- Aghion, Philippe & Tirole, Jean, 1997. "Formal and Real Authority in Organizations," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 1-29, February.
- Andrea Prat & Aldo Rustichini, 2003.
"Games Played Through Agents,"
Econometric Society, vol. 71(4), pages 989-1026, 07.
- Prat, A. & Rustichini, A., 1999. "Games Played Through Agents," Discussion Paper 1999-68, Tilburg University, Center for Economic Research.
- Wouter Dessein, 2002. "Authority and Communication in Organizations," Review of Economic Studies, Oxford University Press, vol. 69(4), pages 811-838.
- Wouter Dessein, 2000. "Authority and Communication in Organizations," Econometric Society World Congress 2000 Contributed Papers 1747, Econometric Society.
- Miller, Nolan H., 1997. "Efficiency in Partnerships with Joint Monitoring," Journal of Economic Theory, Elsevier, vol. 77(2), pages 285-299, December.
- Lipman Barton L. & Seppi Duane J., 1995. "Robust Inference in Communication Games with Partial Provability," Journal of Economic Theory, Elsevier, vol. 66(2), pages 370-405, August.
- Baliga, Sandeep & Sjostrom, Tomas, 2001. "Optimal Design of Peer Review and Self-Assessment Schemes," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 27-51, Spring.
- Sandeep Baliga & Tomas Sjostrom, 1999. "Optimal Design of Peer Review and Self-Assessment Schemes," Discussion Papers 1290, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Sandeep Baliga, 2000. "Optimal Design of Peer Review and Self-Assessment Schemes," Econometric Society World Congress 2000 Contributed Papers 1516, Econometric Society.
- Eberhard Feess & Ulrich Hege, 1998. "Efficient Liability Rules for Multi-Party Accidents With Moral Hazard," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 154(2), pages 422-450, June.
- Ulrich Hege & Eberhard Feess, 1998. "Efficient Liability Rules for Multi-Party Accidents with Moral Hazard," Post-Print hal-00759758, HAL.
- Hege, U. & Feess, E., 1998. "Efficient liability rules for multi-party accidents with moral hazard," Other publications TiSEM e216300c-126c-4e48-ad1f-2, Tilburg University, School of Economics and Management.
- Ilya Segal, 1999. "Contracting with Externalities," The Quarterly Journal of Economics, Oxford University Press, vol. 114(2), pages 337-388.
- Segal, Ilya, 2003. "Coordination and discrimination in contracting with externalities: divide and conquer?," Journal of Economic Theory, Elsevier, vol. 113(2), pages 147-181, December.
- Che Yeon-Koo, 2002. "Joint Liability and Peer Monitoring under Group Lending," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 2(1), pages 1-28, July.
- Nalbantian, Haig R & Schotter, Andrew, 1997. "Productivity under Group Incentives: An Experimental Study," American Economic Review, American Economic Association, vol. 87(3), pages 314-341, June.
- Nalbantian, Haig & Schotter, Andrew, 1994. "Productivity Under Group Incentives: An Experimental Study," Working Papers 94-04, C.V. Starr Center for Applied Economics, New York University.
- Arnott, Richard & Stiglitz, Joseph E, 1991. "Moral Hazard and Nonmarket Institutions: Dysfunctional Crowding Out or Peer Monitoring?," American Economic Review, American Economic Association, vol. 81(1), pages 179-190, March.
- Ching-To Ma, 1988. "Unique Implementation of Incentive Contracts with Many Agents," Review of Economic Studies, Oxford University Press, vol. 55(4), pages 555-572.
- Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
- V. Crawford & J. Sobel, 2010. "Strategic Information Transmission," Levine's Working Paper Archive 544, David K. Levine.
- Prendergast, Canice, 1993. "A Theory of "Yes Men."," American Economic Review, American Economic Association, vol. 83(4), pages 757-770, September.
- Muller, Holger M & Warneryd, Karl, 2001. "Inside versus Outside Ownership: A Political Theory of the Firm," RAND Journal of Economics, The RAND Corporation, vol. 32(3), pages 527-541, Autumn. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:72:y:2009:i:1:p:260-273. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.