Ranking Performance Measures in Multi-Task Agencies

• 成果类型: Article
• 署名作者: Christensen, Peter O.; Sabac, Florin; Tian, Jie (Joyce)
• 署名单位: Aarhus University; University of Alberta
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr.2010.85.5.1545
• 发表日期: 2010
• 页码: 1545-1575
• 关键词: 1st-order approach; Dynamic incentives; career concerns; moral hazard; aggregation; EFFICIENCY; CONTRACTS

摘要

We derive sufficient conditions for ranking performance evaluation systems in multi-task agency models (using both optimal and linear contracts) in terms of a second-order stochastic dominance (SSD) condition on the likelihood ratios. The SSD condition can be replaced by a variance-covariance matrix of likelihood ratios (VCM) condition when the utility function is square-root, the performance measures are normally distributed, and for LEN models. We identify existing results derived under the LEN assumptions that rely on the VCM condition and, thus, also hold for optimal contracts.