Subjective Evaluations: Discretionary Bonuses and Feedback Credibility
AbstractWe provide a new rationale for the use of discretionary bonuses. In a setting with unknown match qualities between a worker and a firm and subjective evaluations by the principal, bonuses are useful in order to make the feedback from the firm to the workers credible. This way workers in good matches are less inclined to accept outside offers.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7758.
Length: 11 pages
Date of creation: Nov 2013
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Find related papers by JEL classification:
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- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
- M5 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-12-06 (All new papers)
- NEP-BEC-2013-12-06 (Business Economics)
- NEP-CTA-2013-12-06 (Contract Theory & Applications)
- NEP-HRM-2013-12-06 (Human Capital & Human Resource Management)
- NEP-MIC-2013-12-06 (Microeconomics)
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