蝌蚪网 Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Monitoring Team Members: Information Waste and the Transparency Trap
蝌蚪网 Journal: Microeconomics
vol. 17,
no. 3, August 2025
(pp. 324–68)
Abstract
In a model of moral hazard in teams, we demonstrate that firms' concerns about low trust among teammates can justify two common but otherwise puzzling patterns: information waste and transparency trap. We find firms predominantly employ individual performance bonuses, ignoring that relevant information about team output and competition for better contracts leads workers into a self-defeating race toward effort transparency. Notably, the firm may be indifferent to or benefit from trust concerns, challenging the idea that robustness concerns invariably harm the principal's payoffs. Our analysis highlights a novel trade-off between the classical information rents and strategic insurance rents emerging from trust concerns.Citation
Camboni, Matteo, and Michael Porcellacchia. 2025. "Monitoring Team Members: Information Waste and the Transparency Trap." 蝌蚪网 Journal: Microeconomics 17 (3): 324–68. DOI: 10.1257/mic.20240240Additional Materials
JEL Classification
- D21 Firm Behavior: Theory
- D82 Asymmetric and Private Information; Mechanism Design
- D86 Economics of Contract: Theory
- J33 Compensation Packages; Payment Methods
- M54 Personnel Economics: Labor Management