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Shaping Incentives through Measurement and Contracts

Bonham, Jonathan - 2020

optimal contract with a strikingly simple closed form — that efficiently motivate the same productive action. Because … incentives can be embedded in the measure or the contract, any distortions in one are offset by adjusting the other, which can …

Persistent link: https://www.econbiz.de/10012823241

Subjective evaluations with performance feedback

Zábojník, Ján - 2011 - This version: November 9, 2011

This paper models two key roles of subjective performance evaluations: their incentive role and their feedback role. The paper shows that the feedback role makes subjective pay feasible even without repeated interaction, as long as there exists some verifiable measure of performance. It also...

Persistent link: https://www.econbiz.de/10009388480

Incentive design and mis-allocated effort : conference paper

Schnedler, Wendelin - 2013 - Preliminary version

Incentives often distort behavior: they induce agents to exert effort but this effort is not employed optimally. This paper proposes a theory of incentive design allowing for such distorted behavior. At the heart of the theory is a trade-off between getting the agent to exert effort and ensuring...

Persistent link: https://www.econbiz.de/10010344596

All hat and no cattle? : ESG incentives in executive compensation

Efing, Matthias; Ehmann, Stefanie; Kampkötter, Patrick; … - 2024

This paper examines the integration of ESG performance metrics into executive compensation using a detailed panel dataset of European executives. Despite becoming more widespread, most ESG metrics are largely discretionary, carry immaterial weights in payout calculations, and contribute little...

Persistent link: https://www.econbiz.de/10015077841

Monitoring and pay : an experiment on contract design with endogenous monitoring ; conference paper

Dittrich, Dennis; Kocher, Martin - 2014 - Preprint submitted to Draft

We implement a laboratory experiment in which a principal has to decide on monitoring intensity and pay to investigate whether they are complements or substitutes. Wage level, monitoring intensity, and consequently the desired enforceable effort level are jointly determined by the maximization...

Persistent link: https://www.econbiz.de/10010489889

Fairness properties of compensation schemes

Becker, Christoph; Fehr, Dietmar; Rau, Hannes; … - 2025

How do different characteristics of pay-for-performance schemes affect fairness perceptions? In two studies, we systematically consider three major classes of incentive schemes: continuous piece rate incentives, discrete bonus schemes, and tournament incentives. We find that pay inequality has a...

Persistent link: https://www.econbiz.de/10015414143

Economic Consequences of Managerial Compensation Contract Disclosure

Xiong, Yan; Jiang, Xu - 2022

We analytically study the economic consequences of the disclosure of managerial compensation contracts in a setting …. Each manager is privately informed about her firm's profitability from this investment. We find that the disclosure leads … not disclosed; under this regime, equilibrium contracts only focus on long-term outcomes. Moreover, while disclosure …

Persistent link: https://www.econbiz.de/10013298722

Incentives, project choice, and dynamic multitasking

Szydlowski, Martin - In: Theoretical economics : TE ; an open access journal in … 14 (2019) 3, pp. 813-847

to an NPV criterion can occur on the path of the contract. As past performance increases, the firm chooses projects which … efficiently, and project choice depends more on the NPV and less on the incentive costs. I implement the optimal contract with an …

Persistent link: https://www.econbiz.de/10012104572

Social comparison and optimal contracts in competition for managerial talent

Ulrichshofer, Anna; Walzl, Markus - 2020

We analyze the impact of social comparison on optimal contract design under imperfect labor market competition for …

Persistent link: https://www.econbiz.de/10012253115

Incentivizing Autonomous Workers

Madsen, Erik; Williams, Basil; Skrzypacz, Andrzej - 2023

Workers in an important category of jobs select tasks autonomously. We study the tradeoff between monetary bonuses and non-monetary prizes as tools for guiding their choices. An optimal incentive scheme prioritizes workers for prizes in return for taking on underserved tasks, and this...

Persistent link: https://www.econbiz.de/10014359170