Optimal contracting with subjective evaluation

• 成果类型: Article
• 署名作者: MacLeod, WB
• 署名单位: University of Southern California; University of Southern California
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/000282803321455232
• 发表日期: 2003
• 页码: 216-240
• 关键词: incentive contracts; implicit; DISCRIMINATION; EXISTENCE; games

摘要

This paper extends the standard principal-agent model to allow for subjective evaluation. The optimal contract results in more compressed pay relative to the case with verifiable performance measures. Moreover, discrimination against an individual implies lower pay and performance, suggesting that the extent of discrimination as measured after controlling for performance may underestimate the level of true discrimination. Finally, the optimal contract entails the use of bonus pay rather than the threat of dismissal, hence neither efficiency wages nor the right to dismiss an employee are necessary ingredients for an optimal incentive contract.