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Teams with moral hazard and non-verifiable quality assessment

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  • Saak, Alexander E.

Abstract

This paper shows that buying from a team of sellers can be optimal for the buyer in a static model where the buyer has private information about quality, sellers have private information about the cost and choice of effort, and quality is not contractible.

Suggested Citation

  • Saak, Alexander E., 2015. "Teams with moral hazard and non-verifiable quality assessment," Economics Letters, Elsevier, vol. 136(C), pages 88-91.
    • Handle: RePEc:eee:ecolet:v:136:y:2015:i:c:p:88-91
    DOI: 10.1016/j.econlet.2015.09.014
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    References listed on IDEAS

    as
    1. Susan Athey & Kyle Bagwell & Chris Sanchirico, 2004. "Collusion and Price Rigidity," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(2), pages 317-349.
    2. Jonathan Levin, 2003. "Relational Incentive Contracts," American Economic Review, American Economic Association, vol. 93(3), pages 835-857, June.
    3. Heski Bar-Isaac, 2007. "Something to prove: reputation in teams," RAND Journal of Economics, RAND Corporation, vol. 38(2), pages 495-511, June.
    4. Emmanuelle Auriol & Guido Friebel & Lambros Pechlivanos, 2002. "Career Concerns in Teams," Journal of Labor Economics, University of Chicago Press, vol. 20(2), pages 289-307, Part.
    5. Alexander E. Saak, 2012. "Collective Reputation, Social Norms, and Participation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(3), pages 763-785.
    6. Holloway, Garth & Nicholson, Charles & Delgado, Chris & Staal, Steve & Ehui, Simeon, 2000. "Agroindustrialization through institutional innovation: Transaction costs, cooperatives and milk-market development in the east-African highlands," Agricultural Economics, Blackwell, vol. 23(3), pages 279-288, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Moral hazard; Teams; Endogenous team size; Private monitoring; Quality;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics

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