volume 19, issue 2, P268-284 2003
DOI: 10.1093/oxrep/19.2.268
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P. Courty

Abstract: We present a model of how organizations manage performance measures when gaming is revealed over time. The incentive designer does not know when it selects a performance measure whether it will communicate the right behavior. Only over time does the principal find out the agent's responses and then uses this additional information to update and fine-tune the incentive system. Using data from a government organization, we test the model's main prediction that the correlation between a performance measure and th…

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