The More Closely We Are Watched, the Better We Behave?

2006 ◽  
Author(s):  
Andrea Prat
Keyword(s):  
Corporate Governance ◽  
Direct Cost ◽  
Sensitive Information ◽  
Conceptual Tool ◽  
Agent Model ◽  
The Right To Privacy ◽  
Limited Application ◽  
Principal Agent Model ◽  
Game Theoretic ◽  
The Right

This chapter provides a brief survey of the economic literature on transparency. The conceptual tool used by economists is the principal-agent model, a game-theoretic setting in which transparency corresponds to the ability of the principal to observe what the agent does. Holmström (1979) provides a powerful and general rationale for full transparency. One can argue that the increase in accountability is not sufficient to offset other drawbacks such as the violation of privacy, the direct cost of disclosure, or the revelation of sensitive information. Alternatively, one can attack the link between transparency and accountability: it is not necessarily true that more disclosure makes the agent behave better. Holmström showed that, in a world of complete contracts, the more the principal knows about the agent, the better the agent behaves. Some objections to Holmström – the right to privacy, the direct cost of disclosure, the risk that hostile parties learn sensitive information – are perfectly valid, but they find limited application in politics, corporate governance, and other important areas.

Game Theory as a Tool for Understanding Information Services Outsourcing

1997 ◽  
Vol 12 (1) ◽  
pp. 45-60 ◽  
Author(s):  
Ramy Elitzur ◽  
Anthony Wensley
Keyword(s):  
Game Theory ◽  
Information Systems ◽  
Information Structure ◽  
Agent Model ◽  
Services Outsourcing ◽  
Principal Agent Model ◽  
Game Theoretic ◽  
Person Game ◽  
Key Aspects ◽  
And Function

In recent years, game theory has provided valuable insights into many different types of organizational arrangements. In this paper we investigate some of the ways in which game theory can help us to understand the structure and function of information systems outsourcing arrangements. We provide a brief review of two-person non-cooperative game theory. We discuss the basic concepts of dominance and Nash equilibria. In particular we stress the importance of the information structure of two-person games. We then provide a general game-theoretic interpretation of many key aspects of information systems outsourcing arrangements. In particular, we investigate the rationales behind many of the different ways of determining fees and the effects of the transfer of assets between the outsourcing company and the outsourcing vendor. Finally, we discuss how one particular type of non-cooperative two-person game might be useful as a model of information systems outsourcing arrangements. This model, the principal-agent model, has been extensively studied and in the hands of the authors has provided some initial insights into information systems outsourcing arrangements.

Optimal Contracting with Subjective Evaluation

2003 ◽  
Vol 93 (1) ◽  
pp. 216-240 ◽  
Author(s):  
W. Bentley Macleod
Keyword(s):  
Subjective Evaluation ◽  
Efficiency Wages ◽  
Optimal Contract ◽  
Agent Model ◽  
Optimal Contracting ◽  
Bonus Pay ◽  
True Discrimination ◽  
Principal Agent Model ◽  
And Performance ◽  
The Right

This paper extends the standard principal–agent model to allow for subjective evaluation. The optimal contract results in more compressed pay relative to the case with verifiable performance measures. Moreover, discrimination against an individual implies lower pay and performance, suggesting that the extent of discrimination as measured after controlling for performance may underestimate the level of true discrimination. Finally, the optimal contract entails the use of bonus pay rather than the threat of dismissal, hence neither “efficiency wages” nor the right to dismiss an employee are necessary ingredients for an optimal incentive contract.

Corporate Governance

1995 ◽  
Vol 153 ◽  
pp. 84-107 ◽  
Author(s):  
John Kay ◽  
Aubrey Silberston
Keyword(s):  
Corporate Governance ◽  
Social Institutions ◽  
Company Law ◽  
Principal Agent ◽  
Chief Executives ◽  
Agent Model ◽  
Corporate Managers ◽  
Current State ◽  
Effective System ◽  
Principal Agent Model

Both those who are critical of the current structure of corporate governance, and those who support it, share a common set of prenaises. The corporation is owned by its shareholders: managers exert power and responsibility on behalf of their shareholders: corporate governance is a question of effective accountability to shareholders. If there are problems, they should be dealt with by making these mechanisms more effective. This article challenges that view.The principal-agent model bears no relationship to the way large companies are actually run. The attempt to bring reality in line with the model is one possible road to reform: another is to adjust the model to reality. Shareholders do not own large companies, in any ordinary sense of the word own. Firms like BT or BP are social institutions, owned by nobody. The distinction between plc and the owner managed limited company should be real, and not just titular. Corporate managers are not the agents of the shareholders, but the trustees of the assets of the corporation, which include its reputation, its distinctive capabilities, and the skills of the employees and suppliers. Their objective should not be to maximise shareholder value but to further the interests of the business.This account is probably a better description of the current state of British company law than the principal-agent model, but we advocate a new company statute to put the matter beyond doubt. Disposing of the fiction that executives are the agents of shareholders allows us to establish an effective system for achieving the key goals of corporate governance: freedom for managers to manage, combined with real accountability for their performance. We advocate a fixed four-year term for company chief executives, involving a wide ranging and searching review of effectiveness which would involve not only directors and shareholders but advisors, associated companies and employees.It is better that property should be private, but that man should make it common in use …. it is the task of the legislator to see that the citizens become like that. Aristotle

Automation of Contagion Vigilance

1997 ◽  
Vol 36 (03) ◽  
pp. 221-232
Author(s):  
D. S. Stodolsky
Keyword(s):  
Partner Notification ◽  
Security Requirements ◽  
Contact Tracing ◽  
Sensitive Information ◽  
Risk Of Infection ◽  
The Right To Privacy ◽  
Long Latency ◽  
Optimal Health ◽  
Extensive Information ◽  
The Right

The very long latency between HIV infection and the appearance of AIDS imposes extensive information processing requirements on partner notification efforts. The apparently contradictory needs of maintaining the right to privacy of infected persons, while simultaneously providing information to persons at risk of infection, impose severe security requirements. These requirements can be satisfied by a Contagion Management System based upon networked personal computers of a kind now becoming available. Security of information is based upon cryptographic protocols that implement anonymous partner notification (contact tracing) and Privacy-Preserving Negotiation. The proposed scheme has the properties that contact tracing is automated, contacts remain anonymous, sensitive information is kept private, and risk-conscious users act as if sensitive information was public. Optimal health protection can thus be obtained while securing informational rights.

The right to privacy in Albania and the report with other rights

2018 ◽  
Author(s):  
Anxhelina Zhidro ◽  
Arbesa Kurti ◽  
Klodjan Skënderaj
Keyword(s):  
Right To Privacy ◽  
The Right To Privacy ◽  
The Right
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