Deterring gaming with imperfect evaluation methods
AbstractThis 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper 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.
Length: 27 pages
Date of creation: 26 Jan 2006
Date of revision:
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
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- George Baker & Robert Gibbons & Kevin J. Murphy, 1993.
"Subjective Performance Measures in Optimal Incentive Contracts,"
NBER Working Papers
4480, National Bureau of Economic Research, Inc.
- 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.
- Pascal Courty & Gerald Marschke, 2003.
"Dynamics of Performance-Measurement Systems,"
Oxford Review of Economic Policy,
Oxford University Press, vol. 19(2), pages 268-284, Summer.
- George Baker, 2002. "Distortion and Risk in Optimal Incentive Contracts," Journal of Human Resources, University of Wisconsin Press, vol. 37(4), pages 728-751.
- Heinrich W. Ursprung, 2003. "Schneewittchen im Land der Klapperschlangen: Evaluation eines Evaluators," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 4(2), pages 177-190, 05.
- Dominique Demougin & Claude Fluet, 2003.
"Inequity Aversion in Tournaments,"
Cahiers de recherche
- Timothy Besley & Maitreesh Ghatak, 2005.
"Competition and Incentives with Motivated Agents,"
American Economic Review,
American Economic Association, vol. 95(3), pages 616-636, June.
- Kräkel, Matthias, 2004.
"Tournaments versus Piece Rates under Limited Liability,"
Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems
15, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Matthias Kräkel, 2004. "Tournaments versus Piece Rates under Limited Liability," Bonn Econ Discussion Papers bgse8_2004, University of Bonn, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gerald Eisenkopf).
If references are entirely missing, you can add them using this form.