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Immediate self-reporting of mistakes

Author: Wathieu, Luc INSEAD Area: Technology and Operations Management Series: Working Paper ; 93/54/TM Publisher: Fontainebleau : INSEAD, 1993.Language: EnglishDescription: 13 p.Type of document: INSEAD Working Paper Online Access: Click here Abstract: Individuals are naturally tempted to delay reporting of mistakes that occur under their responsability. This results from ordinary features of intertemporal preferences. In many settings however, a principal (a superior authority) needs to be immediately notified, so that he can quickly react to minimize the consequences of the mistake. It then becomes of primary importance to obtain an immediate self-report from the responsible agent. In the incentives scheme that we propose, we give an unusual role to monitoring : the principal sets monitoring dates so as to manipulate the agent's temporal horizon, and this (together with an appropriate combination of real incentives) suffices to ensure timely self-reporting
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Individuals are naturally tempted to delay reporting of mistakes that occur under their responsability. This results from ordinary features of intertemporal preferences. In many settings however, a principal (a superior authority) needs to be immediately notified, so that he can quickly react to minimize the consequences of the mistake. It then becomes of primary importance to obtain an immediate self-report from the responsible agent. In the incentives scheme that we propose, we give an unusual role to monitoring : the principal sets monitoring dates so as to manipulate the agent's temporal horizon, and this (together with an appropriate combination of real incentives) suffices to ensure timely self-reporting

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