Efficiency in Hierarchies: Implementing the First-Best Solution by Sequential Actions.
A model of a firm with one principal and two agents is considered. The actions of the agents are not observed by the principal; hence there is moral hazard. It is shown that when the agents act sequentially -- that is, agent 2 takes his action conditional upon agent 1's choice -- the first-best...
| Main Authors: | , |
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| Format: | Journal article |
| Language: | English |
| Published: |
Blackwell Publishing
1989
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