Wasteful Sanctions, Underperformance, and Endogenous Supervision
نویسندگان
چکیده
We study optimal contracting in team settings where agents have many opportunities to shirk, task-level monitoring is needed to provide useful incentives, and it is difficult to write individual performance into formal contracts. Incentives are provided informally, using wasteful sanctions like guilt and shame, or slowed promotion. These features give rise to optimal contracts with underperformance, forgiving sanctioning schemes, and endogenous supervision structures. Agents optimally take on more assigned tasks than they intend to complete, leading to the concentration of supervisory responsibility in the hands of one or two agents. (JEL D82, D86, J41, M12, M54)
منابع مشابه
Supplement to “ Wasteful sanctions , underperformance , and endogenous supervision ”
In this supplemental appendix we consider contracts that are symmetric with respect to task names and for which the amount of monitoring to be accomplished (denoted F ) is public. In this case, the sanction depends on the number of failures f of inspection, where f ∈ {0, 1, . . . , F}. Within this class, contracts which deliver increasingly large sanctions for larger numbers of inspection failu...
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