Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/299928 
Year of Publication: 
2024
Series/Report no.: 
IZA Discussion Papers No. 17000
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We study the impact of monitoring in a workplace context where both firms and employees are unable to perfectly observe the individual worker contribution to total output. Therefore, in our setting monitoring is not aimed at reducing information asymmetries but still affects effort and output. We show that if individuals are prudent, firms call for less monitoring. Workers' stance towards monitoring is ambiguous and depends on risk aversion and the disutility of effort. Our "prudence effect" offers some clues for a more nuanced interpretation of the attitudes towards monitoring by firms and workers.
Subjects: 
monitoring
prudence
workers' effort
JEL: 
D81
J24
M52
Document Type: 
Working Paper

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