Hidden action, identification and organisation design

Wendelin Schnedler

The Centre for Market and Public Organisation from The Centre for Market and Public Organisation, University of Bristol, UK

Abstract: Incentives often fail in inducing economic agents to engage in a desirable activity; implementability is restricted. What restricts implementability? When does re-organization help to overcome this restriction? This paper shows that any restriction of implementability is caused by an identification problem. It also describes organizations that can solve this identfication problem and provides conditions under which such organisations exist. Applying the findings to established and new moral hazard models yields insights into optimal organization design, uncovers the reason why certain organization designs, such as advocacy or specialization, overcome restricted implementability, and formalizes a widespread type of multi-tasking problem.

Keywords: moral hazard; hidden action; implementation; multi-tasking; identification by organisation design (search for similar items in EconPapers)
JEL-codes: D82 D86 M41 M52 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2010-11
New Economics Papers: this item is included in nep-cta
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.bristol.ac.uk/cmpo/publications/papers/2010/wp250.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.bristol.ac.uk/cmpo/publications/papers/2010/wp250.pdf [302 Moved Temporarily]--> https://www.bristol.ac.uk/cmpo/publications/papers/2010/wp250.pdf)

Related works:
Working Paper: Hidden Action, Identification, and Organization Design (2010)
Working Paper: Hidden Action, Identification, and Organization Design (2010)
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:bri:cmpowp:10/250

Access Statistics for this paper

More papers in The Centre for Market and Public Organisation from The Centre for Market and Public Organisation, University of Bristol, UK Contact information at EDIRC.
Bibliographic data for series maintained by ().