摘要
This paper examines moral hazard problems in team setting. It is shown that there may exist budget balancing Nash equilibrium sharing rules that yield Pareto optimal (first best) efficiency provided that any of the following three conditions is satisfied: if peer pressure plays the role of mutual monitoring, or if agents over estimate the effects of their actions on jointed production, or if agents are sufficiently risk averse. The role played by the monitors in inducing first best efficiency is also discussed.
This paper examines moral hazard problems in team setting. It is shown that there may exist budget balancing Nash equilibrium sharing rules that yield Pareto optimal (first best) efficiency provided that any of the following three conditions is satisfied: if peer pressure plays the role of mutual monitoring, or if agents over estimate the effects of their actions on jointed production, or if agents are sufficiently risk averse. The role played by the monitors in inducing first best efficiency is also discussed.
基金
This research is supported by the post doctoral research foundation at the Amos Tuck School ofDartmouth College
