In this paper the impact of ability and learning potential on incentive contracts is analyzed. A central feature of the model is that the true ability will not be revealed. The learning potential of an agent is modeled as the magnitude of impact on the agent's expected ability that...

In this paper the impact of ability and learning potential on incentive contracts is analyzed. The model's pay structure shows if agents must be motivated both to acquire knowledge and to use it appropriately the most successful agent need not be the one who receives the highest pay ex post. A...

In this paper the impact of ability and learning potential on incentive contracts is analyzed. A central feature of the model is that the true ability will not be revealed. The learning potential of an agent is modeled as the magnitude of impact on the agent's expected ability that...