Optimal contracting with subjective evaluation

more complex than designing optimal authority contracts. Key words and phrases . Subjective evaluation, malfeasance, guile, authority contract, sales contract. Here, the optimal contract penalizes the agent only if the public output and the supervisor's evaluation are at their respective worst levels. The supervisor is  Optimal contract: w (q) = (. wH if q q2. wL if q = q1 and t(q) = wH for all q . – Principal pays a constant wage, and he “burns” money in the lowest state. – Intuition: 

However whereas the problem of constructing an optimal contract with subjective evaluation (which is defined simply as a signal in most papers) receives a large attention, firm-level evaluation Downloadable (with restrictions)! This paper extends the standard principal-agent model to allow for subjective evaluation. The optimal contract results in more compressed pay relative to the case with verifiable performance measures. Moreover, discrimination against an individual implies lower pay and performance, suggesting that the extent of discrimination as measured after controlling for NBER Program(s):Labor Studies Program, Technical Working Papers. We introduce a general Principal-Agent model with subjective evaluation and malfeasance characterized by two-sided asymmetric information on performance that allows for an arbitrary information structure. Two generic contract forms are studied. Optimal Contracting with Subjective Evaluation Revisited Kong-Pin Chen Chien-Lung Cheny Szu-Hsien Hoz May 19, 2016 Abstract This paper revisits the property of the optimal contract of a static principal-agent relationship with subjective performance evaluations (MacLeod, 2003), but assuming that the principal and the agent receive correlated On Optimal Contracting with Subjective Evaluation W. Bentley MacLeod 1 TheUniversity of Southern California Los Angeles,CA 90089-0253 June 2001 1I would like to thank Canice Prendergast for suggesting this problem and for helpful comments on a first draft. I also greatly appreciated the comments of Janet Currie and Jonathan Levin, and thank Mehdi Farsi for excellent

Optimal Contracting with Subjective Evaluation: The Effects of Timing, Malfeasance and Guile. W. Bentley MacLeod, Teck Yong Tan. NBER Working Paper No.

Subjective performance evaluation and optimal incentive contract. In economics, there is a large body of theoretical literature on optimal incentive contracting with both objective measures and Optimal Contracting with Subjective Evaluation. This paper extends the standard principal-agent model to allow for subjecti~~e evaluation. The optimal contract results in more compressed pay relative to the case ~ith~,er(fiableperformance measures. Optimal Contracting with Subjective Evaluation: The Effects of Timing, Malfeasance and Guile W. Bentley MacLeod and Teck Yong Tan NBER Working Paper No. 22156 April 2016 JEL No. D86,J33,J41 ABSTRACT We introduce a general Principal-Agent model with subjective evaluation and malfeasance However whereas the problem of constructing an optimal contract with subjective evaluation (which is defined simply as a signal in most papers) receives a large attention, firm-level evaluation Downloadable (with restrictions)! This paper extends the standard principal-agent model to allow for subjective evaluation. The optimal contract results in more compressed pay relative to the case with verifiable performance measures. Moreover, discrimination against an individual implies lower pay and performance, suggesting that the extent of discrimination as measured after controlling for

NBER Program(s):Labor Studies Program, Technical Working Papers. We introduce a general Principal-Agent model with subjective evaluation and malfeasance characterized by two-sided asymmetric information on performance that allows for an arbitrary information structure. Two generic contract forms are studied.

23 Feb 2015 contract puts more weight on subjective measures (because the improved of) the notion of mist in performance evaluation by requir-ing that  William Bentley MacLeod (born 1954) is a Canadian-American economist. He is the Sami Mnaymneh Professor of Economics and Professor of International and Public Affairs at Columbia University and an Affiliated Faculty at Columbia Law School. He is a specialist in the fields of law, labor and contract theory. " Optimal Contracting with Subjective Evaluation," American Economic  11 Oct 2018 The wage and communication pattern results from optimal contracting with standard preferences. To explain these empirical observations, I study  the value of subjective performance indicators for contracting purposes, the loss MacLeod, W. (2003), 'Optimal contracting with subjective evaluation'. MacLeod (2003), “Optimal Contracting with Subjective Evaluation,” American Economic Re- view. 2. Page 3. Innes (1990), “Limited Liability and Incentive 

NBER Program(s):Labor Studies Program, Technical Working Papers. We introduce a general Principal-Agent model with subjective evaluation and malfeasance characterized by two-sided asymmetric information on performance that allows for an arbitrary information structure. Two generic contract forms are studied.

9 Feb 2016 in a variety of design contracts that involve subjective evaluation for the optimal contract such as the use of right of refusal and multiple  of performance shapes the optimal incentive contract. In this setting, subjective evaluations are useful for incentive provision because they are based. Subjective performance evaluation, however, is also fraught with some problems Before deriving the optimal reports of the supervisor for inequality averse agents, we MacLeod, W. B. (2003): Optimal Contracting with Subjective Evaluation. If a measure of performance is subjective then it is inherently private. hazard problem on the Agent's side is combined with private evaluations on the Principal's We start by characterizing the optimal contract for a finite horizon problem. and Contract Enforcement” (Journal of Economics Literature, 2007); and “ Optimal Contracting with Subjective Evaluation” (American Economic Review, 2003). and Contract Enforcement”, Journal of Economics Literature (2007); and " Optimal Contracting with Subjective Evaluation," American Economic Review ( 2003). complementing objective performance evaluation with subjective assessment is optimal contract design for firms where workers are subjectively assessed by 

Optimal Contracting with Subjective Evaluation Revisited Kong-Pin Chen Chien-Lung Cheny Szu-Hsien Hoz May 19, 2016 Abstract This paper revisits the property of the optimal contract of a static principal-agent relationship with subjective performance evaluations (MacLeod, 2003), but assuming that the principal and the agent receive correlated

However whereas the problem of constructing an optimal contract with subjective evaluation (which is defined simply as a signal in most papers) receives a large attention, firm-level evaluation Downloadable (with restrictions)! This paper extends the standard principal-agent model to allow for subjective evaluation. The optimal contract results in more compressed pay relative to the case with verifiable performance measures. Moreover, discrimination against an individual implies lower pay and performance, suggesting that the extent of discrimination as measured after controlling for NBER Program(s):Labor Studies Program, Technical Working Papers. We introduce a general Principal-Agent model with subjective evaluation and malfeasance characterized by two-sided asymmetric information on performance that allows for an arbitrary information structure. Two generic contract forms are studied.

23 Feb 2015 contract puts more weight on subjective measures (because the improved of) the notion of mist in performance evaluation by requir-ing that  William Bentley MacLeod (born 1954) is a Canadian-American economist. He is the Sami Mnaymneh Professor of Economics and Professor of International and Public Affairs at Columbia University and an Affiliated Faculty at Columbia Law School. He is a specialist in the fields of law, labor and contract theory. " Optimal Contracting with Subjective Evaluation," American Economic  11 Oct 2018 The wage and communication pattern results from optimal contracting with standard preferences. To explain these empirical observations, I study  the value of subjective performance indicators for contracting purposes, the loss MacLeod, W. (2003), 'Optimal contracting with subjective evaluation'. MacLeod (2003), “Optimal Contracting with Subjective Evaluation,” American Economic Re- view. 2. Page 3. Innes (1990), “Limited Liability and Incentive  9 Feb 2016 in a variety of design contracts that involve subjective evaluation for the optimal contract such as the use of right of refusal and multiple