Moral Hazard in Teams with Uncertainty, and Transfers or Repetition as Enforcement Mechanisms

Claude d ASPREMONT () and Louis-André Gérard-Varet
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Claude d ASPREMONT: CORE, Université catholique de Louvain, B-1348 Louvain-la-Neuve, Belgium
Authors registered in the RePEc Author Service: Claude d'Aspremont

No 1994073, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: Properties of stochastic outcome functions are exploited to solve the moral hazard problem in teams under unobservable individual actions and different individual objectives. Two kinds of enforcement mechanisms are considered: Enforcement through utility transfers and enforcement through repetition. For both more general results are obtained by adapting conditions previously derived to ensure truthful revelation of private information for collective deciSion-making. These conditions are shown to be generic. Also, one of these being weaker than the condition of pairwise identifiability used by Fudenberg, Levine and Maskin, a new Folk theorem is obtained.

Keywords: Mechanism design; team moral hazard; folk theorem (search for similar items in EconPapers)
JEL-codes: D2 D7 (search for similar items in EconPapers)
Date: 1994-12-01
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Moral Hazard in Teams with Uncertainty, and Transfers of Repetition as Enforcement Mechanisms (1995)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:1994073

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