Not logged in.

Contribution Details

Type Working Paper
Scope Discipline-based scholarship
Title Delegating performance evaluation
Organization Unit
  • Igor Letina
  • Shuo Liu
  • Nick Netzer
  • English
Institution University of Zurich
Series Name Working paper series / Department of Economics
Number 266
ISSN 1664-7041
Number of Pages 65
Date 2018
Abstract Text We study optimal incentive contracts with multiple agents when performance evaluation is delegated to a reviewer. The reviewer may be biased in favor of the agents, but the degree of bias is unknown to the principal. We show that a contest, which is a contract in which the principal determines a set of prizes to be allocated to the agents, is optimal. By using a contest, the principal can commit to sustaining incentives despite the reviewer's potential leniency bias. The optimal effort profile can be uniquely implemented by an all-pay auction with a cap. Our analysis has implications for applications as diverse as the design of worker compensation, the awarding of research grants, and the allocation of foreign aid.
Free access at Related URL
Official URL
Related URLs
PDF File Download from ZORA
Export BibTeX
Keywords Performance evaluation, delegation, optimality of contests, Spieltheorie, Agency-Theorie, Leistungsbeurteilung, Delegation, Ressourcenallokation
Additional Information Revised version