Moral Hazard in Teams Export

@article{citeulike:515194, abstract = {This article studies moral hazard with many agents. The focus is on two features that are novel in a multiagent setting: free riding and competition. The free-rider problem implies a new role for the principal: administering incentive schemes that do not balance the budget. This new role is essential for controlling incentives and suggests that firms in which ownership and labor are partly separated will have an advantage over partnerships in which output is distributed among agents. A new characterization of informative (hence valuable) monitoring is derived and applied to analyze the value of relative performance evaluation. It is shown that competition among agents (due to relative evaluations) has merit solely as a device to extract information optimally. Competition per se is worthless. The role of aggregate measures in relative performance evaluation is also explored, and the implications for investment rules are discussed.}, author = {Holmstrom, Bengt}, citeulike-article-id = {515194}, citeulike-linkout-0 = {http://dx.doi.org/10.2307/3003457}, citeulike-linkout-1 = {http://www.jstor.org/stable/3003457}, doi = {10.2307/3003457}, issn = {0361915X}, journal = {The Bell Journal of Economics}, keywords = {moral\_hazard, tartumicropapers}, number = {2}, pages = {324--340}, posted-at = {2006-02-21 22:07:02}, priority = {2}, publisher = {The RAND Corporation}, title = {Moral Hazard in Teams}, url = {http://dx.doi.org/10.2307/3003457}, volume = {13}, year = {1982} }

TY - JOUR ID - citeulike:515194 L3 - citeulike-article-id:515194 N2 - This article studies moral hazard with many agents. The focus is on two features that are novel in a multiagent setting: free riding and competition. The free-rider problem implies a new role for the principal: administering incentive schemes that do not balance the budget. This new role is essential for controlling incentives and suggests that firms in which ownership and labor are partly separated will have an advantage over partnerships in which output is distributed among agents. A new characterization of informative (hence valuable) monitoring is derived and applied to analyze the value of relative performance evaluation. It is shown that competition among agents (due to relative evaluations) has merit solely as a device to extract information optimally. Competition per se is worthless. The role of aggregate measures in relative performance evaluation is also explored, and the implications for investment rules are discussed. IS - 2 JF - The Bell Journal of Economics SN - 0361915X EP - 340 TI - Moral Hazard in Teams PB - The RAND Corporation VL - 13 SP - 324 KW - moral_hazard KW - tartumicropapers AU - Holmstrom, Bengt PY - 1982/// UR - http://dx.doi.org/10.2307/3003457 ER -