Task-specific abilities in multi-task principal-agent relationships
This paper analyzes a multi-task agency framework where the agent exhibits task-specific abilities. It illustrates how incentive contracts account for the agent's task-specific abilities if contractible performance measures do not reflect the agent's multidimensional contribution to firm value. This paper further sheds light on potential ranking criteria for performance measures in multi-task principal-agent relationships. It demonstrates that performance measures in multi-task agencies cannot necessarily be compared by their respective signal-to-noise ratio as in single-task agency relationships. In fact, it is indispensable to take the induced effort distortion and the measure-cost efficiency into consideration--both determined by the agent's task-specific abilities.
Year of publication: |
2010
|
---|---|
Authors: | Thiele, Veikko |
Published in: |
Labour Economics. - Elsevier, ISSN 0927-5371. - Vol. 17.2010, 4, p. 690-698
|
Publisher: |
Elsevier |
Keywords: | Task-specific human capital Performance measurement Distortion Multi-task agencies Congruence Incentives |
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