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Deterring gaming with imperfect evaluation methods

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Author Info
Gerald Eisenkopf () (Department of Economics, University of Konstanz)
Abstract

This paper introduces and discusses an idea which minimizes gaming or manipulation activities, if payments are linked to results from manipulative methods. The idea is to add nonmanipulable information to manipulable information to improve the evaluation of a given output. A score declining in increasing evaluation quality indicates gaming and allows to estimate the true result. A simple linear incentive scheme is introduced in which a high evaluation score is rewarded. The introduced mechanism dominates any single evaluation method. However, limited liability restricts its applicability. If agents are risk-averse, the principal should let each agent decide, which evaluation method he prefers.

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Publisher Info
Paper provided by Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim in its series Working Papers of the Research Group Heterogenous Labor with number 06-04.

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Length: 27 pages
Date of creation: 26 Jan 2006
Date of revision:
Handle: RePEc:knz:hetero:0604

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Postal: D-78457 Konstanz
Phone: +49 7531 88 2314
Web page: http://www.uni-konstanz.de/forschergruppewiwi
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Related research
Keywords: Gaming ; Manipulation ; Evaluation ; Risk Aversion ; Research Management ; Agency Theory;

Find related papers by JEL classification:
M52 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
M40 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - General
D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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  1. Matthias Kräkel, 2004. "Tournaments versus Piece Rates under Limited Liability," Discussion Papers 15, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
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  2. Baker, George & Gibbons, Robert & Murphy, Kevin J, 1994. "Subjective Performance Measures in Optimal Incentive Contracts," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 1125-56, November. [Downloadable!] (restricted)
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  3. Besley, Timothy J. & Ghatak, Maitreesh, 2004. "Competition and Incentives with Motivated Agents," CEPR Discussion Papers 4641, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  4. Dominique Demougin & Claude Fluet, 2003. "Inequity Aversion in Tournaments," Cahiers de recherche 0322, CIRPEE. [Downloadable!]
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  5. Heinrich W. Ursprung, 2003. "Schneewittchen im Land der Klapperschlangen: Evaluation eines Evaluators," Perspektiven der Wirtschaftspolitik, Blackwell Publishing, vol. 4(2), pages 177-190, 05. [Downloadable!] (restricted)
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