On the hidden costs of monitoring corruption or effort

0341789 - NHU-C 2011 RIV CZ eng J - Journal Article
Krajčová, Jana
On the hidden costs of monitoring corruption or effort.
CERGE-EI Working Paper Series. -, č. 404 (2010), s. 1-37. ISSN 1211-3298
R&D Projects: GA MŠMT LC542
Institutional research plan: CEZ:MSM0021620846
Keywords : corruption * monitoring * two-period principal-agent model
Subject RIV: AH - Economics
http://www.cerge-ei.cz/pdf/wp/Wp404.pdf

In this paper, I analyze the effects of monitoring on an agent’s incentives in a two-period principal-agent model in which the agent decides on his effort and corruptibility. The agent’s type and strategy are unknown to the principal. I compare incentive-compatible wages under three different scenarios: when the principal does not monitor and only observes output; when she monitors the agent’s effort choice; and when she monitors the agent’s corruptibility.
Permanent Link: http://hdl.handle.net/11104/0184668