Incentive contracts and elections for politicians with multi-task problems

We consider a model with a politician facing a multi-task problem while in office. The reelection mechanism distorts the allocation of effort in favor of tasks whose outcomes can be measured more precisely than others. We show that a combination of elections and incentive contracts can alleviate this inefficiency. The incentive contract does not require direct information about the performance of the politician and is self-financing across terms.

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Year of publication:	2008
Authors:	Gersbach, Hans ; Liessem, Verena
Published in:	Journal of Economic Behavior & Organization. - Elsevier, ISSN 0167-2681. - Vol. 68.2008, 2, p. 401-411
Publisher:	Elsevier
Subject:	Elections Incentive contracts Multi-task problems

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005145729