Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/25217 
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dc.contributor.authorSchöttner, Anjaen
dc.contributor.authorThiele, Veikkoen
dc.date.accessioned2008-02-19-
dc.date.accessioned2009-07-23T14:45:00Z-
dc.date.available2009-07-23T14:45:00Z-
dc.date.issued2007-
dc.identifier.urihttp://hdl.handle.net/10419/25217-
dc.description.abstractWe analyze the optimal combination of promotion tournaments and individual performance pay in an employment relationship. An agent's effort is non-observable and he has private information about his suitability for promotion. We find that the principal does not provide individual incentives if it is sufficiently important to promote the most suitable candidate. Thus, we give a possible explanation for why individual performance schemes are less often observed in practice than predicted by theory. Furthermore, optimally trading off incentive and selection issues causes a form of the Peter Principle: The less suitable agent has an inefficiently high probability of promotion.en
dc.language.isoengen
dc.publisher|aHumboldt University of Berlin, Collaborative Research Center 649 - Economic Risk |cBerlinen
dc.relation.ispartofseries|aSFB 649 Discussion Paper |x2007,045en
dc.subject.jelD82en
dc.subject.jelD86en
dc.subject.jelM52en
dc.subject.ddc330en
dc.subject.keywordPromotion Tournamentsen
dc.subject.keywordPiece Ratesen
dc.subject.keywordHidden Characteristicsen
dc.subject.keywordHidden Actionen
dc.subject.stwErwerbsverlaufen
dc.subject.stwLeistungsorientierte Vergütungen
dc.subject.stwAgency Theoryen
dc.subject.stwTheorieen
dc.titlePromotion tournaments and individual performance pay-
dc.type|aWorking Paperen
dc.identifier.ppn558561349en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

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