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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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
References listed on IDEAS 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.:
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.
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