Secret Contracts for Efficient Partnerships

David Rahman () and Ichiro Obara ()

No 2008-3, Working Papers from University of Minnesota, Department of Economics

Abstract: By allocating dierent information to team members, secret contracts can provide better incentives to perform with an intuitive organizational design. For instance, they may help to monitor monitors, and appoint secret principals. Generally, secret contracts highlight a rich duality between detection and enforcement with linear transfers. On the one hand, disobedient deviations must be detectable to enforce a given outcome, but dierent behavior may be used to detect dierent deviations. On the other hand, disobedient deviations must be attributable, i.e., some individual can be identi ed as innocent, to provide incentives with budget balance.

Keywords: secret contracts; partnerships; duality; private monitoring. (search for similar items in EconPapers)
JEL-codes: D21 D23 D82 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec and nep-cta
Date: 2008, Revised 2008
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http://www.econ.umn.edu/merr/2008_3.pdf First version, 2008 (application/pdf)

Related works:
Working Paper: Secret Contracts for Efficient Partnerships (2008)
Working Paper: Secret Contracts for Efficient Partnerships (2007)
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Persistent link: http://EconPapers.repec.org/RePEc:min:wpaper:2008-3

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