Multi-task incentive contract and performance measurement with multidimensional types

doi:10.1016/j.geb.2012.10.012

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	Multi-task incentive contract and performance measurement with multidimensional types
	Meng, Dawen 1; Tian, Guoqiang 2
刊名	GAMES AND ECONOMIC BEHAVIOR
	2013-01
卷号	77 期号:1 页码:377-404
关键词	Multi-task incentive model Multidimensional mechanism design Low-powered incentive Missing incentive
ISSN号	0899-8256
DOI	10.1016/j.geb.2012.10.012
英文摘要	This paper provides a new explanation for the dominance of the low-powered incentive contract over the high-powered incentive contract using a hybrid model of moral hazard and adverse selection. We first show that unobservable risk aversion or cost leads to low-powered incentives. We then consider the case where both risk aversion and cost of the agent are unobservable to the principal. This multidimensional mechanism design problem is solved under two assumptions with regard to the structures of performance measurement system and wage contract. It is shown that if the deterministic and stochastic components of performance measures vary proportionally, the principal is inclined to provide a low-powered incentive contract. Moreover, it is shown that if the base wage depends on a quadratic function rather than the direction of the performance wage vector, no incentive is provided for most of the performance measures in an orthogonal performance measurement system. (c) 2012 Elsevier Inc. All rights reserved.
WOS研究方向	Business & Economics
语种	英语
出版者	ACADEMIC PRESS INC ELSEVIER SCIENCE
WOS记录号	WOS:000314734700023
内容类型	期刊论文
源URL	[http://10.2.47.112/handle/2XS4QKH4/2052]
专题	上海财经大学
通讯作者	Tian, Guoqiang
作者单位	1.Shanghai Univ Finance & Econ, Inst Adv Res, Key Lab Math Econ SHUFE, Minist Educ, Shanghai 200433, Peoples R China; 2.Texas A&M Univ, Dept Econ, College Stn, TX 77843 USA
推荐引用方式 GB/T 7714	Meng, Dawen,Tian, Guoqiang. Multi-task incentive contract and performance measurement with multidimensional types[J]. GAMES AND ECONOMIC BEHAVIOR,2013,77(1):377-404.
APA	Meng, Dawen,&Tian, Guoqiang.(2013).Multi-task incentive contract and performance measurement with multidimensional types.GAMES AND ECONOMIC BEHAVIOR,77(1),377-404.
MLA	Meng, Dawen,et al."Multi-task incentive contract and performance measurement with multidimensional types".GAMES AND ECONOMIC BEHAVIOR 77.1(2013):377-404.