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Zur verzerrten Performancemessung in Agency-Modellen

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  • Michael Kopel

    (Technische Universität Wien)

Abstract

Summary A central assumption in many models on incentive contracting is that the principal’s objective is always a contractible performance measure. In many situations this assumption is not supportable, and for an evaluation of the agent’s effort alternative and oftentimes distortionary performance measures must be used. Under these circumstances the question arises which factors determine the quality of a good performance measure. We show that the quality of such an alternative measure is determined by the fact how it responds to the agent’s actions in relation to the way the principal’s objective responds to these actions. Furthermore, it is demonstrated that, in general, inefficiency occurs even if the agent is risk neutral.

Suggested Citation

  • Michael Kopel, 1998. "Zur verzerrten Performancemessung in Agency-Modellen," Schmalenbach Journal of Business Research, Springer, vol. 50(6), pages 531-550, June.
    • Handle: RePEc:spr:sjobre:v:50:y:1998:i:6:d:10.1007_bf03371520
    DOI: 10.1007/BF03371520
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    References listed on IDEAS

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    1. Baker, George P & Jensen, Michael C & Murphy, Kevin J, 1988. " Compensation and Incentives: Practice vs. Theory," Journal of Finance, American Finance Association, vol. 43(3), pages 593-616, July.
    2. George Baker & Robert Gibbons & Kevin J. Murphy, 1994. "Subjective Performance Measures in Optimal Incentive Contracts," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(4), pages 1125-1156.
    3. Baker, George P, 1992. "Incentive Contracts and Performance Measurement," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 598-614, June.
    4. Melumad, Nahum D. & Reichelstein, Stefan, 1989. "Value of communication in agencies," Journal of Economic Theory, Elsevier, vol. 47(2), pages 334-368, April.
    5. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    6. Harris, Milton & Raviv, Artur, 1979. "Optimal incentive contracts with imperfect information," Journal of Economic Theory, Elsevier, vol. 20(2), pages 231-259, April.
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    Cited by:

    1. Michael Krapp, 2000. "Relative Leistungsbewertung im dynamischen Kontext — Eine Analyse der Kollusionsproblematik bei wiederholter Delegation," Schmalenbach Journal of Business Research, Springer, vol. 52(3), pages 257-277, May.

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