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dc.contributor.authorKaarbøe, Oddvar M.
dc.contributor.authorOlsen, Trond E.
dc.date.accessioned2006-07-13T07:40:36Z
dc.date.available2006-07-13T07:40:36Z
dc.date.issued2004-12
dc.identifier.issn1500-4066
dc.identifier.urihttp://hdl.handle.net/11250/163733
dc.description.abstractIncentive contracts must typically be based on performance measures that do not exactly match agents' true contribution to principals' objectives. Such misalignment may impose difficulties for effective incentive design. We analyze to what extent implicit dynamic incentives such as career concerns and ratchet effects alleviate or aggravate these problems. Our analysis demonstrates that the interplay between distorted performance measures and implicit incentives implies that career and ratchet effects have real effects, that career and monetary incentives may be complements, and that stronger ratchet effects or more distortion may increase optimal monetary incentives.en
dc.format.extent181929 bytes
dc.format.mimetypeapplication/pdf
dc.language.isoengen
dc.publisherNorwegian School of Economics and Business Administration. Department of Finance and Management Scienceen
dc.relation.ispartofseriesDiscussion paperen
dc.relation.ispartofseries2004:21en
dc.titleDistorted performance measures and dynamic incentivesen
dc.typeWorking paperen


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