Monitoring Workers as a Screening Device

Avner Bar-ilan

Canadian Journal of Economics, 1991, vol. 24, issue 2, 460-70

Abstract: This paper presents a model of trade-off between employee moral hazard and adverse selection. When productivity is unobservable and heterogeneous, a firm can use the information extracted from shirking (moral hazard) to alleviate the problem of adverse selection and improve its pool of workers. This generates equilibrium shirking and monitoring even if any shirking can be eliminated using employee bonds. The point is demonstrated in a model in which performance bonds serve as an incentive device and in another model in which efficiency wages serve this purpose.

Date: 1991
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://links.jstor.org/sici?sici=0008-4085%2819910 ... WAASD%3E2.0.CO%3B2-K (text/html)
only available to JSTOR subscribers

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:cje:issued:v:24:y:1991:i:2:p:460-70

Ordering information: This journal article can be ordered from
https://www.economic ... ionen/membership.php

Access Statistics for this article

Canadian Journal of Economics is currently edited by Zhiqi Chen

More articles in Canadian Journal of Economics from Canadian Economics Association Canadian Economics Association Prof. Werrner Antweiler, Treasurer UBC Sauder School of Business 2053 Main Mall Vancouver, BC, V6T 1Z2. Contact information at EDIRC.
Bibliographic data for series maintained by Prof. Werner Antweiler ().