We analyze how limited contractibility and the informational quality of audits affect inventory levels and the optimality of individual versus team-based production. We use a two-period agency model in which contractibility is limited and agents meet a fixed delivery quota each period. A costly...

The academic and practitioner literature justifies firms' use of product costs in product pricing and capacity planning decisions as heuristics to address an otherwise intractable problem. However, product costs are the output of a cost reporting system, which itself is the outcome of heuristic...