Buried in Paperwork: Excessive Reporting in Organizations

Roland Strausz ()

No 27, Discussion Papers from SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: This paper offers an explanation why a principal may demand too much paperwork from a subordinate: Due to limited liability and moral hazard a principal is unable to appropriate all rents. Internal paperwork allows a more accurate monitoring of the agent and enables the principal to appropriate a larger part of the agent's rent. In her decision the principal disregards the agent's cost increase of more internal paperwork. Consequently, the requested amount of internal paperwork may be too high from both the agent's personal point of view and the organization as a whole.

JEL-codes: D23 D82 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec
Date: Written
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Related works:
Working Paper: Buried in Paperwork: Excessive Reporting in Organizations
Journal Article: Buried in paperwork: Excessive reporting in organizations (2006)
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