Privacy and Team Incentives Journal Article

Overview

abstract

• ABSTRACT; Real‐world contracts are typically private, observed only by their direct signatories, so agents working together are vulnerable to the principal opportunistically reducing other agents' incentives. The principal can mitigate this commitment problem by giving the most skilled agent a budget and delegating authority to write other agents' contracts. This endogenous hierarchy, never optimal with public contracts, raises effort, output, and compensation but allows rent extraction. The principal prefers it when contracts are opaque enough, skill is sufficiently heterogeneous across agents, and joint output is sensitive enough to effort. Our model provides novel predictions for the structure of banking syndicates.

CU Boulder Authors

• Buffa, Andrea

publication date

• December 1, 2025

Date in CU Experts

• January 14, 2026 6:11 AM

Full Author List

• BUFFA AM; LIU Q; WHITE L

author count

• 3

published in

• Journal of Finance  Journal

Other Profiles

International Standard Serial Number (ISSN)

• 0022-1082

Electronic International Standard Serial Number (EISSN)

• 1540-6261

Digital Object Identifier (DOI)

• https://doi.org/10.1111/jofi.13496

Additional Document Info

start page

• 3443

end page

• 3497

volume

• 80

issue

• 6