Thiele, Veikko (2007): Task-Specific Abilities in Multi-Task Agency Relations.
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Abstract
This paper analyzes a multi-task agency framework where the agent exhibits task-specific abilities. It illustrates how incentive contracts account for the agent's task-specific abilities if contractible performance measures do not reflect the agent's contribution to firm value. This paper further sheds light on potential ranking criteria for performance measures in multi-task agencies. It demonstrates that the value of performance measures in multi-task agencies cannot necessarily be compared by their respective signal/noise ratios as in single-task agency relations. It is rather pivotal to take the induced effort distortion and measure-cost efficiency into consideration -- both determined by the agent's task specific abilities.
Item Type: | MPRA Paper |
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Institution: | University of British Columbia |
Original Title: | Task-Specific Abilities in Multi-Task Agency Relations |
Language: | English |
Keywords: | Task-specific human capital; performance measurement; distortion; multi-task agencies; congruence; incentives |
Subjects: | D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information ; Mechanism Design J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity |
Item ID: | 7404 |
Depositing User: | Veikko Thiele |
Date Deposited: | 04 Mar 2008 02:01 |
Last Modified: | 27 Sep 2019 00:15 |
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URI: | https://mpra.ub.uni-muenchen.de/id/eprint/7404 |
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Task-Specific Abilities in Multi-Task Agency Relations. (deposited 01 Apr 2007)
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Task-Specific Abilities in Multi-Task Agency Relations. (deposited 01 Mar 2008 07:02)
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Task-Specific Abilities in Multi-Task Agency Relations. (deposited 01 Mar 2008 07:02)