Impact of Alternative Reporting Systems in Multi-Agent Contracting
Gerald A. Feltham
University of British Columbia
Ludwig-Maximilians-Universität Munich - Faculty of Business Administration (Munich School of Management)
November 15, 2005
AAA Management Accounting Section 2006 Meeting Paper
Sauder School of Business Working Paper
The analysis in this paper extends the single-agent/multi-task LEN model in Feltham/Xie (1994) to a multi-agent/multi-task context. A key feature of the paper is that we consider the impact of alternative reporting systems on full- and limited-commitment contracts. With a centralized reporting system all performance measures are reported to the principal, while some measures are not reported to the principal with a decentralized reporting system. Under limited commitment, the principal may prefer to restrict the agents' access to certain measures. While additional reports are weakly preferred if there is full commitment, these reports may have a negative effect if there is limited commitment.
Number of Pages in PDF File: 48working papers series
Date posted: July 31, 2005
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