Template-Type:ReDIF-Paper 1.0  
Title:External vs Internal Monitors: 
     The Role of Restructuring Consequences and Information Technologies
Author-Name: Will, Heide C. U.
Classification-JEL: 
Keywords: 
Abstract: This paper analyses the relative efficiency of internal and external 
	monitors. It confirms the intuition that, if the principal and her employees 
	share aligned interests, internal monitoring is superior to external monitoring; 
	vice versa if interests diverge. This result is not robust for two alternative 
	information technologies considered. If monitoring effort affects the frequency 
	instead of the accuracy of produced signals, the optimal monitoring mode depends 
	on the contingency policy that is adopted in case monitoring fails. If, by contrast, 
	the obtained signals are nonverifiable, then internal monitoring is weakly dominant.
Keywords: contracts, externalities, interest alignment, monitoring
Classification-JEL: D23, D8
Length: pages
Creation-Date: 1998-07
Revision-Date: 
Handle: RePEc:bon:bonsfa:576
File-URL: http://www.wiwi.uni-bonn.de/bgsepapers/bonsfa/bonsfa576.pdf
File-Format: application/pdf