Monitoring in multiagent organizations

doi:10.1506/0PJG-FUTB-KJ5P-2FX0

2010-01-15

PRE

Tim Baldenius *

Nahum D. Melumad

Ziv Amir

DOI：10.1506/0PJG-FUTB-KJ5P-2FX0

原文链接

原文求助

摘要

En 中文

This paper studies how to assign monitors to productive agents in order to generate signals about the agents' performance that are most useful from a contracting perspective. We show that if signals generated by the same monitor are negatively (positively) correlated, then the optimal monitoring assignment will be focused (dispersed). This holds because dispersed monitoring allows the firm to better utilize relative performance evaluation. On the other hand, if each monitor communicates only an aggregated signal to the principal, then focused monitoring is always optimal since aggregation undermines relative performance evaluation. We also study team-based compensation and randomized monitoring assignments. In particular, we show that the firm can gain from randomizing the monitoring assignment, compared with the optimal linear deterministic contract. Furthermore, under randomization, the conditional expected utility for the agent is higher when the agent is not monitored compared with the case where the agent is monitored. That is, the chance of being monitored serves as a stick rather than a carrot.

Keyword:

aggregation

monitoring

organization design

principal-agent

randomization