Distortion and Risk in Optimal Incentive Contracts

By Jasjit Singh, Lars A. Stole. 2002

247 citations recorded by the source corpus.

View Paper: https://www.semanticscholar.org/paper/ef66adcdeaac9976cefcb84478dfe01a9f548e62

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

Citations in the corpus

Incentives Between Firms (and Within) (2005, methodology): “Baker et al. (1994) explore the simultaneous use of formal contracts based on objective performance measures p and relational contracts involving discretionary bonuses based on total contribution y .”
The Promise and Pitfalls of Using Imprecise School Accountability Measures (2002, background): “If perfonnance measures are noisy or if they have the potential to distort behavior in lmdesirable ways, then the literature on optimal incentives suggests that the marginal payoff attached to such measures be downweighted (Baker, 1992,2000).”
Incentives and Test-Based Accountability in Education (2011, background): “A theoretical analysis shows that an optimal incentives scheme will place less weight on performance measures that are subject to greater uncertainty because they are subject to factors that the workers do not control (Baker, 2002).”
The Production of Human Capital in Developed Countries: Evidence from 196 Randomized Field Experiments (2016, unknown): “[20] Baker, George.”
Peer Firms in Relative Performance Evaluation (2009, unknown): “Gibbons and Murphy (1990) and Baker (2002) argue that the inability to identify an appropriate peer group can be a reason for firms not to use RPE in compensation contracts.”
THE USE OF PERFORMANCE MEASUREMENT SYSTEMS IN THE PUBLIC SECTOR: EFFECTS ON PERFORMANCE (2014, background): “…that are perfectly aligned with the organization’s ultimate objectives, and (3) that organizational actors know and control the production function that transforms efforts into results (cf. for instance Baker, 2002; Feltham & Xie, 1994; Gibbons, 1998; Hofstede, 1981; Otley & Berry, 1980).”
Multitasking, Information Disclosure and Product Quality: Evidence from Nursing Homes (2012, background): “The fact that firms take more actions than regulators can measure can eventually lead to a distortion of quality measures (Feltham and Xie, 1994; Baker, 1992, 2002).”
Teacher Quality in Educational Production. Tracking, Decay, and Student Achievement. NBER Working Paper No. 14442. (2008, unknown): “Baker (1992, 2002) considers a performance measure that is less than perfectly correlated with the worker's contribution to firm output.”
Integrating Acquired Capabilities: When Structural Integration Is (Un)necessary (2009, background): “…between the acquired and acquiring organization by aligning interests towards the goals of the integrated unit (see the discussion in Williamson, 1985 about the contrast between highpowered competitive incentives and low powered collaborative incentives; also see Baker, 2002 for a formal analysis).”
Incentives and their dynamics in public sector performance management systems (2010, methodology): “Baker, Gibbons, and Murphy (1994) argue that a better result may be obtained if evaluation is based on both objective and subjective measures of performance, particularly if the two measures capture different aspects of employee effort. Clearly, subjective evaluation is imperfect, and it may be more”
Where do transactions come from? Modularity, transactions, and the boundaries of firms (2007, methodology): “…if design information transfers are counted and compensated, there is a risk—indeed a certainty—that unproductive transfers will take place, not because they add value but because they add or subtract “points” to a compensation scorecard (Kerr, 1975; Holmstrom and Milgrom, 1994; Baker, 2002).”
Four formal(izable) theories of the firm (2005, background): “As one way to model the control-versus-contract distinction (and the “contracting for control” empirical literature just described), I will followBaker et al. (2004a) by assuming that an asset consist of three components: a vector of extricable decision rights, d (where extricable means that these d”