The DOI matches its Crossref record; 1 of the 1 references it cites were found in a registry or an index.
Moral Hazard in Teams
Open accessAbstract
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.
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Citations
Cites
Good News and Bad News: Representation Theorems and Applications
Milgrom, P. R. (1981) · The Bell Journal of Economics · doi:10.2307/3003562 · Cited by 3,123
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Holmstrom, B., & Milgrom, P. (1991) · The Journal of Law, Economics, and Organization · doi:10.1093/jleo/7.special_issue.24 · Cited by 6,046
Self-citationDisclosure, Liquidity, and the Cost of Capital
DIAMOND, D. W., & VERRECCHIA, R. E. (1991) · The Journal of Finance · doi:10.1111/j.1540-6261.1991.tb04620.x · Cited by 3,836
The Provision of Incentives in Firms
Prendergast, C. (1999) · Journal of Economic Literature · doi:10.1257/jel.37.1.7 · Cited by 3,338
General purpose technologies ‘Engines of growth’?
Bresnahan, T. F., & Trajtenberg, M. (1995) · Journal of Econometrics · doi:10.1016/0304-4076(94)01598-t · Cited by 2,879
Incentives and Problem Uncertainty in Innovation Contests: An Empirical Analysis
Boudreau, K. J., Lacetera, N., & Lakhani, K. R. (2011) · Management Science · doi:10.1287/mnsc.1110.1322 · Cited by 830
The effects of financial reporting and disclosure on corporate investment: A review
Roychowdhury, S., Shroff, N., & Verdi, R. S. (2019) · Journal of Accounting and Economics · doi:10.1016/j.jacceco.2019.101246 · Cited by 749
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Plambeck, E. L. (2012) · Energy Economics · doi:10.1016/j.eneco.2012.08.031 · Cited by 302
Optimal Managerial Contracts and Equilibrium Security Prices
Diamond, D. W., & Verrecchia, R. E. (1982) · The Journal of Finance · doi:10.2307/2327326 · Cited by 286
Dimson, E., Karakaş, O., & Li, X. (2018) · SSRN Electronic Journal · doi:10.2139/ssrn.3209072 · Cited by 70
Formal and Informal Contracting: Theory and Evidence
Gil, R., & Zanarone, G. (2017) · Annual Review of Law and Social Science · doi:10.1146/annurev-lawsocsci-110316-113413 · Cited by 56
The Reverse Matthew Effect: Consequences of Retraction in Scientific Teams
Jin, G. Z., Jones, B., Lu, S. F., & Uzzi, B. (2019) · The Review of Economics and Statistics · doi:10.1162/rest_a_00780 · Cited by 41
Hansen, Z., Owan, H., & Pan, J. (2006) · doi:10.3386/w12251 · Cited by 29
Axtell, R. (2018) · Handbook of Computational Economics · doi:10.1016/bs.hescom.2018.05.001 · Cited by 13
Metadata
- Authors
- Holmstrom, B.
- Venue
- The Bell Journal of Economics
- Publisher
- JSTOR
- Published
- 1982
- Volume
- 13
- Issue
- 2
- Pages
- 324
- ISSN
- 0361-915X (ISSN-L)
- OpenAlex
- W1542323922
- Cited by
- 4,903
- References
- 1
- FWCI
- 23.33
- Type
- journal article
- Language
- en
- Open access
- green
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Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
