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Fishing for Excuses and Performance Evaluation
Larmande, Francois; Ponssard, Jean-Pierre - 2021
We study a principal-agent model in which the agent can provide ex-post additional relevant information regarding his performance. In particular, he can provide a legitimate excuse, that is, evidence that a poor result is only due to factors outside his control. However, building a convincing...
Persistent link: https://www.econbiz.de/10013315637
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Do Managers with Limited Liability Take More Risky Decisions? An Information Acquisition Model
Malcomson, James M. - 2021
Risk-neutral individuals take more risky decisions when they have limited liability. Risk-neutral managers may not when acting as agents under contract and taking costly actions to acquire information before taking decisions. Limited liability makes it optimal to increase the reward for outcomes...
Persistent link: https://www.econbiz.de/10013316254
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Contractual and Organizational Structure with Reciprocal Agents
Englmaier, Florian; Leider, Stephen - 2021
Empirically, compensation systems generate substantial effort despite weak monetary incentives. We consider reciprocal … motivations as a source of incentives. We solve for the optimal contract in the basic principal-agent problem and show that … sources of incentives to best induce effort from the agent. Analyzing extended versions of the model allows us to examine how …
Persistent link: https://www.econbiz.de/10013316554
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Fishing for Excuses and Performance Evaluation
Larmande, François; Ponssard, Jean-Pierre - CESifo - 2014
We study a principal-agent model in which the agent can provide ex post additional relevant information regarding his performance. In particular, he can provide a legitimate excuse, that is, evidence that a poor result is only due to factors outside his control. However, building a convincing...
Persistent link: https://www.econbiz.de/10010877776
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Optimal Contracting with Endogenous Project Mission
Cassar, Lea - 2017
I analyze a model in which a principal offers a contract to an agent and can influence the agent's marginal return of effort by the choice of the project mission. The principal's and the agents' mission preferences are misaligned, and the agents have unobservable intrinsic motivation levels. I...
Persistent link: https://www.econbiz.de/10012966930
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Contractual and Organizational Structurewith Reciprocal Agents
Englmaier, Florian; Leider, Stephen G. - CESifo - 2008
Empirically, compensation systems generate substantial effort despite weak monetary incentives. We consider reciprocal … motivations as a source of incentives. We solve for the optimal contract in the basic principal-agent problem and show that … sources of incentives to best induce effort from the agent. Analyzing extended versions of the model allows us to examine how …
Persistent link: https://www.econbiz.de/10005766075
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Communicating Subjective Evaluations
Lang, Matthias - CESifo - 2014
Should principals explain and justify their evaluations? Suppose the principal’s evaluation is private information, but she can provide justification by sending a costly cheap-talk message. If she does not provide justification, her message space is restricted, but the message is costless. I...
Persistent link: https://www.econbiz.de/10010781550
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Do Managers with Limited Liability Take More Risky Decisions? An Information Acquisition Model
Malcomson, James - CESifo - 2010
Risk-neutral individuals take more risky decisions when they have limited liability. Risk-neutral managers may not when acting as agents under contract and taking costly actions to acquire information before taking decisions. Limited liability makes it optimal to increase the reward for outcomes...
Persistent link: https://www.econbiz.de/10008572569
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Communicating Subjective Evaluations
Lang, Matthias - 2021
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...
Persistent link: https://www.econbiz.de/10013315592
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Hidden Benefits of Reward : A Field Experiment on Motivation and Monetary Incentives
Kvaloy, Ola - 2013
interaction with monetary incentives. We find that motivational talk significantly improves performance only if it is accompanied …
Persistent link: https://www.econbiz.de/10013075962