Relational Incentives and Moral Hazard in Teams

Volume: 74, Issue: 3, Pages: 937 - 963
Published: Jul 1, 2007
Abstract
This paper studies moral hazard in teams using a model where efforts are promoted via the combination of profit shares and relational contracts. The focus is on how these two forms of incentives interact. According to the degree of effort observability and the importance of future interaction, the optimal allocation of profit shares can range from a wide dispersion across players to a full concentration of shares in the hands of a single player....
Paper Details
Title
Relational Incentives and Moral Hazard in Teams
Published Date
Jul 1, 2007
Volume
74
Issue
3
Pages
937 - 963
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