“Yes men”, integrity, and the optimal design of incentive contracts
نویسندگان
چکیده
منابع مشابه
”Yes Men,” Integrity, and the Optimal Design of Incentive Contracts
In a pioneering approach towards the explanation of the phenomenon of “yes man” behavior in organizations, Prendergast (1993) argued that incentive contracts in employment relationships generally make a worker distort his privately acquired information. This would imply that there is a trade-off between inducing a worker to exert costly effort and inducing him to tell the truth. In contrast, we...
متن کامل“ Yes men ” , integrity , and the optimal design of incentive contracts q
In a pioneering approach towards the explanation of the phenomenon of “yes man” behavior in organizations, Prendergast [American Economic Review 83 (1993) 757–770] argued that incentive contracts in employment relationships generally make a worker distort his privately acquired information. This would imply that there is a trade-off between inducing a worker to exert costly effort and inducing ...
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This paper analyzes optimal incentive contracts for information acquisition and revelation. A decision maker faces the problem to design a contract that provides an expert with incentives to acquire and reveal information. We show that it is in general not optimal to reward the expert if his recommendation is confirmed. The common observation that experts are paid when their recommendation is c...
متن کاملOptimal Incentive Contracts and Information Cascades
We examine information aggregation regarding industry capital productivity from privately informed managers in a dynamic model with optimal incentive contracts. Information cascades always occur if managers enjoy limited liability: when beliefs regarding productivity become endogenously extreme (optimistic or pessimistic), learning stops. There is no learning if initial beliefs are extreme, or ...
متن کاملOrganizational Design : Decision Rights and Incentive Contracts
Meckling (1992) argue that moving a decision away from the inherently best-informed party involves costs in communication and garbling but may lodge it with someone who has better incentives to make good decisions. But generally we expect that incentives are part of the organizational design. Why not just provide incentives to those with the best information so that they make the right decision...
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ژورنال
عنوان ژورنال: Journal of Economic Behavior & Organization
سال: 2000
ISSN: 0167-2681
DOI: 10.1016/s0167-2681(00)00112-8