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 language | English (US) |
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Pages (from-to) | 404-428 |
Number of pages | 25 |
Journal | RAND Journal of Economics |
Volume | 53 |
Issue number | 2 |
DOIs | |
State | Published - Jun 1 2022 |
Bibliographical note
Publisher Copyright:© 2022, The RAND Corporation.
Keywords
- career concerns
- entrenchment
- monitoring
- strategic experimentation