All-or-Nothing Monitoring: Comment
American Economic Review
vol. 100,
no. 1, March 2010
(pp. 625-27)
Abstract
Zhao (2008) presents an interesting "all-or-nothing monitoring" result for a multitask moral hazard agency problem with partial effort observation. We argue that the optimal contract based on the non-verifiable observation of the agent's effort in Zhao (2008) can be regarded as a limitation on the incentive schemes available to the principal. I then propose some arguably more appropriate approaches for analyzing such agency problems. (D82, D86, M54)Citation
Chen, Bo. 2010. "All-or-Nothing Monitoring: Comment." American Economic Review, 100 (1): 625-27. DOI: 10.1257/aer.100.1.625JEL Classification
- D82 Asymmetric and Private Information
- D86 Economics of Contract: Theory
- M54 Personnel Economics: Labor Management