relation: https://publications.ut-capitole.fr/id/eprint/15413/
title: Moral Hazard in Hierarchies and Soft Information
creator: Angelucci, Charles
creator: Russo, Antonio
subject: B- ECONOMIE ET FINANCE
description: We investigate the scope for supervisory activities in organizations in which  information is non-verifiable and opportunism severe. A principal-supervisor-agent  hierarchy is considered. Side-contracts between supervisor and agent may be reached  both before and after the agent has chosen his hidden action. We find that the supervisor  is useful if and only if appointed before the agent has chosen his action. We also show  that delegation of payroll authority is suboptimal. Finally, some insights concerning the  optimal design of verification activities are provided: when information is non-verifiable,  the supervisor should be employed as a monitor rather than as an auditor.
publisher: TSE Working Paper
date: 2012-10
type: Monograph
type: NonPeerReviewed
format: text
language: en
identifier: https://publications.ut-capitole.fr/id/eprint/15413/1/wp_tse_344.pdf
identifier:   Angelucci, Charles <https://www.idref.fr/166885932> and Russo, Antonio  (2012) Moral Hazard in Hierarchies and Soft Information.  TSE Working Paper, n. 12-343     
relation: http://tse-fr.eu/pub/26384
language: en