Formal versus informal monitoring in teams

Gershkov, A. and Winter, E. (2015) Formal versus informal monitoring in teams. American Economic Journal: Microeconomics, 7 (2). pp. 27-44. ISSN 1945-7669

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Abstract

In this paper we analyze a principal's optimal monitoring strategies in a team environment. In doing so we study the interaction between formal monitoring and informal ( peer) monitoring. We show that if the technology satisfies complementarity, peer monitoring substitutes for the principal's monitoring. However, if the technology satisfies substitution, the principal's optimal monitoring is independent of the peer monitoring. We also show that if the technology satisfies complementarity, then the principal in the optimal contracts will monitor more closely than in the case of substitution.

Item Type:
Journal Article
Journal or Publication Title:
American Economic Journal: Microeconomics
Uncontrolled Keywords:
/dk/atira/pure/subjectarea/asjc/2000
Subjects:
ID Code:
126908
Deposited By:
Deposited On:
14 Aug 2018 13:56
Refereed?:
Yes
Published?:
Published
Last Modified:
26 May 2020 07:03