Experimentation in Organizations

Sofia Moroni

No 5876, Working Paper from Department of Economics, University of Pittsburgh

Abstract: I consider a moral hazard problem in which a principal provides incentives to a team of agents towork on a risky project. The project consists of two milestones of unknown feasibility. While workingunsuccessfully, the agents’ private beliefs regarding the feasibility of the project decline. This learningrequires the principal to provide rents to prevent the agents from procrastinating and free-riding onothers’ discoveries. To reduce these rents the principal stops the project inefficiently early and givesidentical agents asymmetric experimentation assignments. The principal prefers to reward agents withbetter contract terms or task assignments rather than monetary bonuses.

Date: 2016-01
New Economics Papers: this item is included in nep-mic and nep-ppm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.econ.pitt.edu/sites/default/files/working_papers/WP16-016.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pit:wpaper:5876

Access Statistics for this paper

More papers in Working Paper from Department of Economics, University of Pittsburgh Contact information at EDIRC.
Bibliographic data for series maintained by Department of Economics, University of Pittsburgh ( this e-mail address is bad, please contact ).