Monitoring and Prudence

Luca Beltrametti () and Gabriele Cardullo ()
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Luca Beltrametti: University of Genova
Gabriele Cardullo: University of Genova

No 17000, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We study the impact of monitoring in a workplace context where both firms and employees are unable to perfectly observe the individual worker contribution to total output. Therefore, in our setting monitoring is not aimed at reducing information asymmetries but still affects effort and output. We show that if individuals are prudent, firms call for less monitoring. Workers' stance towards monitoring is ambiguous and depends on risk aversion and the disutility of effort. Our "prudence effect" offers some clues for a more nuanced interpretation of the attitudes towards monitoring by firms and workers.

Keywords: monitoring; prudence; workers' effort (search for similar items in EconPapers)
JEL-codes: D81 J24 M52 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2024-05
New Economics Papers: this item is included in nep-hrm and nep-mic
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