Imperfect Monitoring of Monitoring Agents: One Reason Why Hierarchies Can Be Superior to "Lean" Organizations

Roland Kirstein

No 2003-07, CSLE Discussion Paper Series from Saarland University, CSLE - Center for the Study of Law and Economics

Abstract: Effective monitoring requires proper incentives and detection skill. Detection skills depend on the extent of specialization in monitoring and on the number of agents to be supervised. This paper demonstrates that hierarchy and monitoring of monitors can provide the necessary incentives for the monitoring agents, which induces them to make use of their detection skill. The model draws on the theory of imperfect diagnosis and explains why hierarchies can be superior to ?lean? organizations. -- Wirksames Monitoring erfordert nicht nur angemessene Anreize, sondern auch Überwachungsfähigkeit. Diese hängt von der Spezialisierung auf Monitoring ab, aber auch von der Zahl der zu überwachenden Agenten. In diesem Beitrag wird gezeigt, dass die Einrichtung einer Hierarchie es erlaubt, Monitoren zu überwachen, um ihnen die nötigen Anreize zu vermitteln kann, ihre Überwachungsfähigkeit zu nutzen. Das Modell nutzt die Theorie imperfekter Diagnosen und erklärt, warum Hierarchien im Vergleich zu ?lean organizations? überlegen sein können.

Keywords: Hierarchy; Imperfect Diagnosis; Monitoring; Incentives (search for similar items in EconPapers)
JEL-codes: D2 L2 (search for similar items in EconPapers)
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://econstor.eu/bitstream/10419/23038/1/2003-07_monitoring.pdf (application/pdf)

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: http://EconPapers.repec.org/RePEc:zbw:csledp:200307

Access Statistics for this paper

More papers in CSLE Discussion Paper Series from Saarland University, CSLE - Center for the Study of Law and Economics
Contact information at EDIRC.
Series data maintained by ZBW - German National Library of Economics ().