Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/94179
Authors: 
Terstiege, Stefan
Year of Publication: 
2013
Series/Report no.: 
SFB/TR 15 Discussion Paper 430
Abstract: 
Why does incentive pay often depend on subjective rather than objective performance evaluations? After all, subjective evaluations entail a credibility issue. While the most plausible explanation for this practice is lack of adequate objective measures, I argue that subjective evaluations might sometimes also be used to withhold information from the worker. I furthermore argue that withholding information is particularly important under circumstances where the credibility issue is small. The statements are derived from a two-stage principal-agent model in which the stochastic relationship between effort and performance is unknown.
Subjects: 
Performance evaluation
principal-agent
moral hazard
JEL: 
D83
D86
M12
M52
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.