Monitoring with career concerns

Iván Marinovic, Martin Szydlowski

Research output: Contribution to journalArticlepeer-review

Abstract

We study monitoring in a continuous-time career concerns model. A monitor oversees an agent and generates verifiable evidence if the agent shirks. The monitor's ability is uncertain and requires costly investment to maintain. Unpunished shirking reveals that the monitor is ineffective, which discourages the monitor from maintaining her ability. The agent shirks strategically to discourage the monitor, because shirking increases the rate of learning. Term limits reduce the incentive to shirk and long-serving monitors accept bribes to hide evidence.

Original languageEnglish (US)
Pages (from-to)404-428
Number of pages25
JournalRAND Journal of Economics
Volume53
Issue number2
DOIs
StatePublished - Jun 1 2022

Bibliographical note

Publisher Copyright:
© 2022, The RAND Corporation.

Keywords

  • career concerns
  • entrenchment
  • monitoring
  • strategic experimentation

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