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dc.contributor.authorANGELUCCI, Charles
dc.contributor.authorRUSSO, Antonio
dc.date.accessioned2012-11-06T13:03:56Z
dc.date.available2012-11-06T13:03:56Z
dc.date.issued2012
dc.identifier.issn1028-3625
dc.identifier.urihttp://hdl.handle.net/1814/24298
dc.description.abstractWe investigate the scope for supervisory activities in organizations in which information is non-verifiable (i.e. soft) and opportunism severe. A principal-supervisor agent hierarchy is considered. Side-contracts between supervisor and agent may be reached both before and after the agent has chosen his hidden action. We find that the supervisor is useful if and only if appointed before the agent has chosen his action. The supervisor is instead useless if asked to verify the agent‘s action only once the latter is completed. We also show that delegation of payroll authority is suboptimal. Finally, some insights concerning the optimal design of verification activities are provided: when information is soft, the supervisor should be employed as a monitor rather than as an auditor.en
dc.format.mimetypeapplication/pdf
dc.language.isoenen
dc.relation.ispartofseriesEUI RSCASen
dc.relation.ispartofseries2012/59en
dc.rightsinfo:eu-repo/semantics/openAccess
dc.subjectCollusionen
dc.subjectExtortionen
dc.subjectDelegationen
dc.subjectMechanism designen
dc.subjectD82en
dc.subjectD86en
dc.subjectL23en
dc.titleMoral Hazard in Hierarchies and Soft Informationen
dc.typeWorking Paperen
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