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Incentives for Motivated Experts in a Partnership

Ting Liu (), Ching-to Ma () and Henry Mak ()
Additional contact information
Ting Liu: Stony Brook University
Henry Mak: Indiana University-Purdue University Indianapolis

No wp2015-006, Boston University - Department of Economics - Working Papers Series from Boston University - Department of Economics

Abstract: A Principal would like low-benefit projects to be serviced by a low-cost-low-productivity expert and high- benefit projects, by a high-cost-high-productivity expert. Experts derive intrinsic or extrinsic motivational benefits from providing services, but must earn minimum profits. The Principal lacks information about project benefits and experts' motivations, which are both known to experts. Experts form a Partnership, which sets up a gatekeeping-referral protocol and a corresponding sharing rule. We show that the Principal can implement the first best by a single contract with the Partnership. The contract is quasi-linear, consisting of a lump sum, and a partial reimbursement of experts' incurred costs.

Keywords: Motivated Experts; Principal; Multiagent; Partnership; Referral (search for similar items in EconPapers)
JEL-codes: D00 D02 D80 D83 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind and nep-mic
Date: 2015-06
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Related works:
Journal Article: Incentives for motivated experts in a partnership (2018) Downloads
Working Paper: Incentives for Motivated Experts in a Partnership (2017) Downloads
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