← Search

American Economic Review Vol. 98 No. 4 2008

All-or-Nothing Monitoring

Rui Zhao

Department of Economics, University at Albany–SUNY, BA 11 0, 1400 Washington Avenue, Albany, NY 12222.

Abstract

A principal can observe both the output and input of an agent who works at a job involving multiple tasks. We provide a simple theory that explains why it may be optimal for the principal to use only an output-based incentive contract, even though the principal can monitor the agent's actions perfectly in all but one task and knows exactly which action is optimal for each task.

DOI
10.1257/aer.98.4.1619
Volume
98
Issue
4
Pages
1619-1628
Language
en
Sources
openalex bibtex:phds-export.bib crossref

Cite