Showing 1 - 10 of 148
When designing incentives for a manager, the trade-off between insuranceand a “good” allocation of effort across various tasks is oftenidentified with a trade-off between the responsiveness (sensitivity, precision,signal-noise ratio) of the performance measure and its similarity(congruity,...
Persistent link: https://www.econbiz.de/10005868463
This paper addresses the question, what metrics should be used for performance evaluation and in particular how they should be weighted and combined in the presence of technological interdependencies when the agents exhibit variedly strong developed rivalry. We find that the principal reacts to...
Persistent link: https://www.econbiz.de/10010427754
This paper analyzes the impact of heterogeneous (social) preferences on the weighting and combination of performance measures as well as on a firm’s profitability. We consider rivalry, egoism and altruism as extreme forms within the continuum of possible preferences and show that the principal...
Persistent link: https://www.econbiz.de/10010427755
I study when a firm prefers to be transparent about pay using a simple multidimensional signaling model. Pay transparency within the firm means that a worker can learn about his own worker-firm match from another worker's pay. This can either encourage or discourage workers – which affects...
Persistent link: https://www.econbiz.de/10014467792
I study a dynamic principal agent model in which the effort cost of the agent is unknown to the principal. The principal is ambiguity averse, and designs a contract which is robust to the worst case effort cost process. Ambiguity divides the contract into two regions. After sufficiently high...
Persistent link: https://www.econbiz.de/10010282917
Consider managers evaluating their employees\' performances. Should managers justify their subjective evaluations? Suppose a manager\'s evaluation is private information. Justifying her evaluation is costly but limits the principal\'s scope for distorting her evaluation of the employee. I show...
Persistent link: https://www.econbiz.de/10011932985
Economic theory typically assumes that people are only interested in their own material wealth. Experimentalists have recently discovered that this assumption is not true under all circumstances. Especially in regular face to face interactions, not only the personal well-being but also the...
Persistent link: https://www.econbiz.de/10010427724
In the model there are two types of financial auditors with identical technology, one of which is endowed with a prior reputation for honesty. We characterize conditions under which there exists a "two-tier equilibrium" in which "reputable" auditors refuse bribes offered by clients for fear of...
Persistent link: https://www.econbiz.de/10010263371
Although relative performance schemes are pervasive in organizations reliable empirical dataon induced sabotage behavior is almost non-existent. We study sabotage in tournaments in acontrolled laboratory experiment and are able to confirm one of the key insights from theory:effort and sabotage...
Persistent link: https://www.econbiz.de/10005868022
How does the environment of an organization inuence whether workersvoluntarily provide eort? We study the power relationship betweena non-prot unit (e.g. university department, NGO, healthtrust), where workers care about the result of their work, and a bu-reaucrat, who supplies some input to the...
Persistent link: https://www.econbiz.de/10005868393