Correlation and relative performance evaluation

• 成果类型: Article
• 署名作者: Fleckinger, Pierre
• 署名单位: heSam Universite; Universite Pantheon-Sorbonne; Paris School of Economics
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2011.11.016
• 发表日期: 2012
• 页码: 93-117
• 关键词: Moral hazard; correlation; Relative vs joint performance evaluation

摘要

This paper reexamines the issue of relative versus joint incentive schemes in a multi-agent moral-hazard framework. The model allows a full analysis of the information and dependence structure. An important result is that the widespread notion that greater correlation in outcomes calls for more competition is not robust. First, when the dependence structure is effort-sensitive, the optimal incentive scheme in general mixes elements of relative evaluation and joint evaluation. Second, under limited liability, higher equilibrium correlation tends to make joint performance evaluation more desirable. Examples are provided regarding incentives in firms, finance and innovation. (C) 2011 Elsevier Inc. All rights reserved.