In this paper, we model two drivers that underlie the economic trade-off that shareholders face in designing incentives for optimal effort allocation by managers. The first driver is the presence of a performance-reporting task, by which we mean managers may exert effort to improve the precision...

In this paper, we model two drivers which underlie the economic trade-off shareholders face in designing incentives for optimal effort allocation by managers. The first driver is limited managerial attention, by which we mean that performing one task may have an adverse effect on the...