The efficiency of bonus-or-terminate incentive schemes under subjective evaluations

B-Tier
Journal: Games and Economic Behavior
Year: 2014
Volume: 87
Issue: C
Pages: 412-418

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We study a repeated principal–agent model with subjective evaluations. We construct simple bonus-or-terminate incentive schemes. In these schemes, the principal evaluates the agent every T periods. The principal pays a bonus and asks the agent to work for T more periods if the evaluation is positive. The relationship is terminated if the evaluation is negative. The inefficiencies in these schemes vanish as the agent can be more frequently evaluated. This result holds generally under objective or subjective evaluations.

Technical Details

RePEc Handle
repec:eee:gamebe:v:87:y:2014:i:c:p:412-418
Journal Field
Theory
Author Count
1
Added to Database
2026-01-25