Performance measurement, expectancy and agency theory
Subtitle: an experimental study
By: by Randolph Sloof, Mirjam van Praag
Contributors: Praag, Mirjam van
Series: Discussion paper -- no. 3064; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) -- no. 3064
Publisher: IZA
Published: 2007
Place of publication: Bonn, Germany
Language: eng
Format: [electronic resource] :
Subjects: Performance; Agency (Law)
Description: "Theoretical analyses of (optimal) performance measures are typically performed within the realm of the linear agency model. This model implies that, for a given compensation scheme, the agent's optimal effort is unrelated to the amount of noise in the performance measure. In contrast, expectancy theory as developed by psychologists predicts lower effort levels for noisier performance measures. We conduct a real effort laboratory experiment and find that effort levels are invariant to changes in the distribution of the noise term, i.e. to expectancy. This suggests that enriching the economic (linear agency) model commonly applied within this area by including an expectancy parameter is not needed"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Title from PDF file as viewed on 10/29/2007.

Includes bibliographical references.

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