Goal setting in the principal-agent model: Weak incentives for strong performance

• 成果类型: Article
• 署名作者: Corgnet, Brice; Gomez-Minambres, Joaquin; Hernan-Gonzalez, Roberto
• 署名单位: Centre National de la Recherche Scientifique (CNRS); Ecole Normale Superieure de Lyon (ENS de LYON); Universite Claude Bernard Lyon 1; Universite Jean Monnet; Universite Lyon 2; emlyon business school; CNRS - Institute for Humanities & Social Sciences (INSHS); Lafayette College; Chapman University System; Chapman University; Universite Bourgogne Europe; Burgundy School of Business
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2017.12.017
• 发表日期: 2018
• 页码: 311-326
• 关键词: Principal-agent models; Incentive theory; Non-monetary incentives; Goal setting; Reference-dependent utility; laboratory experiments

摘要

We study a principal-agent framework in which principals can assign wage-irrelevant goals to agents. We find evidence that, when given the possibility to set wage-irrelevant goals, principals select incentive contracts for which pay is less responsive to agents' performance. Agents' performance is higher in the presence of goal setting despite weaker incentives. We develop a principal-agent model with reference-dependent utility that illustrates how labor contracts combining weak monetary incentives and wage-irrelevant goals can be optimal. The pervasive use of non-monetary incentives in the workplace may help account for previous empirical findings suggesting that firms rely on unexpectedly weak monetary incentives. (C) 2018 Elsevier Inc. All rights reserved.