Team beats collusion
| Autor: | Ozdogan Ayca, Mehmet Barlo |
|---|---|
| Rok vydání: | 2012 |
| Předmět: |
HB Economic Theory
Mechanism design Generality Moral hazard business.industry Principal-agent problems moral hazard linear contracts side--contracting collusion team outsourcing decentralization Principal (computer security) jel:D82 Principal–agent problem Outsourcing jel:J30 Microeconomics restrict Collusion jel:M12 Business Industrial organization |
| Popis: | This paper analyzes optimal contracts in a linear hidden-action model with normally distributed returns possessing two moments that are governed jointly by two agents, who can observe each others' effort levels and draft enforceable side-contracts on chosen effort levels and realized returns. After showing that standard constraints, resulting in incentive-contracts, may fail to ensure implementability, we examine (centralized) collusion-proof contracts and (decentralized) team-contracts. We prove that optimal team--contracts provide the highest implementable returns to the principal. In other words, the principal may restrict attention to outsourcing/decentralization without any loss of generality. Moreover, situations in which incentive--contracts are collusion--proof, thus implementable, are fully characterized. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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