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dc.contributor.authorChi, Chang Koo
dc.contributor.authorOlsen, Trond E.
dc.date.accessioned2018-04-24T06:40:53Z
dc.date.available2018-04-24T06:40:53Z
dc.date.issued2018-04
dc.identifier.issn0804-6824
dc.identifier.urihttp://hdl.handle.net/11250/2495533
dc.description.abstractThis paper analyzes relational contracts under moral hazard. We first show that if the available information (signal) about effort satisfies a generalized monotone likelihood ratio property, then irrespective of whether the first-order approach (FOA) is valid or not, the optimal bonus scheme takes a simple form. The scheme rewards the agent a fixed bonus if his performance index exceeds a threshold, like the FOA contract of Levin (2003), but the threshold can be set differently. We next derive a sufficient and necessary condition for non-verifiable information to improve a relational contract. Our new informativeness criterion sheds light on the nature of an ideal performance measure in relational contracting.nb_NO
dc.language.isoengnb_NO
dc.publisherInstitutt for samfunnsøkonomi, NHHnb_NO
dc.relation.ispartofseriesDP SAM;7/2018
dc.subjectRelational contracts, non-verifiable performance measures, first-order approach, bonus scheme, informativeness criterionsnb_NO
dc.titleRelational Incentive Contracts and Performance Measurement.nb_NO
dc.typeWorking papernb_NO
dc.source.pagenumber34nb_NO


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