Buried in Paperwork: Excessive Reporting in Organizations

نویسنده

  • Roland Strausz
چکیده

This paper offers an explanation why a principal may demand too much paperwork from a subordinate: Due to limited liability and moral hazard a principal is unable to appropriate all rents. Internal paperwork allows a more accurate monitoring of the agent and enables the principal to appropriate a larger part of the agent’s rent. In her decision the principal disregards the agent’s cost increase of more internal paperwork. Consequently, the requested amount of internal paperwork may be too high from both the agent’s personal point of view and the organization as a whole. JEL Classification No.: D23, D82 ∗Free University Berlin, Dept. of Economics, Boltzmannstr.20, D-14195 Berlin (Germany); email address: [email protected]. I thank Ulf Schiller, the associate editor and an anonymous referee for helpful comments. Financial support by the DFG (German Science Foundation) under SFB/TR-15 is gratefully acknowledged.

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تاریخ انتشار 2004