Abstract
I examine how a firm’s opportunity to verify information influences the joint use of verifiable and unverifiable information for incentive contracting. I employ a simple two-period agency model, in which contract frictions arise from limited liability and the potential unverifiability of the principal’s information about the agent’s action. With short-term contract, the principal benefits from both a more informative and a more conservative verification of his private information. With long-term contracts, he may prefer a less informative verification, but his preference for a conservative verification persists.
Dokumententyp: | Paper |
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Fakultät: | Sonderforschungsbereiche > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems
Sonderforschungsbereiche > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems > B4 - Die Gestaltung von Turnieren im Rahmen der Corporate Governance |
Themengebiete: | 300 Sozialwissenschaften > 330 Wirtschaft |
URN: | urn:nbn:de:bvb:19-epub-17412-9 |
Sprache: | Englisch |
Dokumenten ID: | 17412 |
Datum der Veröffentlichung auf Open Access LMU: | 05. Nov. 2013, 14:39 |
Letzte Änderungen: | 04. Nov. 2020, 12:59 |