Ewerhart, Christian and Schmitz, Patrick W. (2000): "Yes Men," Integrity, and the Optimal Design of Incentive Contracts.
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In a pioneering approach towards the explanation of the phenomenon of "yes man" behavior in organizations, Prendergast (1993) argued that incentive contracts in employment relationships generally make a worker distort his privately acquired information. This would imply that there is a trade-off between inducing a worker to exert costly effort and inducing him to tell the truth. In contrast, we show that with optimally designed contracts, which we term integrity contracts, the worker will both exert effort and report his information truthfully, and that hence the first best can be achieved.
|Item Type:||MPRA Paper|
|Original Title:||"Yes Men," Integrity, and the Optimal Design of Incentive Contracts|
|Keywords:||Yes men; Incentive contracts; Integrity|
|Subjects:||D - Microeconomics > D2 - Production and Organizations > D20 - General
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J30 - General
|Depositing User:||Patrick W. Schmitz|
|Date Deposited:||06. Jan 2009 06:17|
|Last Modified:||12. Feb 2013 17:26|
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