Document Type
Discussion Paper
Publication Date
4-1-2009
CFDP Number
1695
CFDP Revision Date
2009-11-01
CFDP Pages
102
Abstract
This paper examines moral hazard in teams over time. Agents are collectively engaged in an uncertain project, and their individual efforts are unobserved. Free-riding leads not only to a reduction in effort, but also to procrastination. The collaboration dwindles over time, but never ceases as long as the project has not succeeded. In fact, the delay until the project succeeds, if it ever does, increases with the number of agents. We show why deadlines, but not necessarily better monitoring, help to mitigate moral hazard.
Recommended Citation
Bonatti, Alessandro and Hörner, Johannes, "Collaborating" (2009). Cowles Foundation Discussion Papers. 2012.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/2012