PERFORMANCE PAY AS A SCREENING DEVICE
Abstract
Analysis of management compensation has focused on the principal — agent problem. We address the problem confronting owners who must choose a manager without knowing the productivity of individual managers. We find performance contingent contracts may result in a separating equilibrium in which high productivity managers accept contracts low productivity managers find unacceptable.
Citation
Chopin, M.C. and Schulman, C.T. (1997), "PERFORMANCE PAY AS A SCREENING DEVICE", Studies in Economics and Finance, Vol. 18 No. 2, pp. 94-108. https://doi.org/10.1108/eb028744
Publisher
:MCB UP Ltd
Copyright © 1997, MCB UP Limited