The use of non-verifialble information regarding the agent's action in compensation contracts
Subjective, non-verifiable information (such as satisfaction rating) is often used to supplement objective, verifiable information (such as financial numbers) in contracting. Empirical research finds that non-verifiable information can be used in contracting as a subjective performance measure or as...
| Main Author: | |
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| Format: | Journal Article |
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Scientific Research Publishing
2016
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| Online Access: | http://hdl.handle.net/20.500.11937/53650 |
| _version_ | 1848759194138705920 |
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| author | Adithipyangkul, Pattarin |
| author_facet | Adithipyangkul, Pattarin |
| author_sort | Adithipyangkul, Pattarin |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | Subjective, non-verifiable information (such as satisfaction rating) is often used to supplement objective, verifiable information (such as financial numbers) in contracting. Empirical research finds that non-verifiable information can be used in contracting as a subjective performance measure or as subjective weighting on an objective performance measure. The differences between the two options have not yet been thoroughly explored analytically. This paper considers a multi-task setting where the non-verifiable performance signal provides incremental information about an aspect of the agent’s action. The research finds that when the agent has unlimited liability, both contracting schemes deliver the same payoff to the principal. However, the principal may strictly prefer a subjective weighting scheme in a setting where the agent has limited liability. |
| first_indexed | 2025-11-14T09:56:00Z |
| format | Journal Article |
| id | curtin-20.500.11937-53650 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T09:56:00Z |
| publishDate | 2016 |
| publisher | Scientific Research Publishing |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-536502017-10-26T06:21:19Z The use of non-verifialble information regarding the agent's action in compensation contracts Adithipyangkul, Pattarin Subjective, non-verifiable information (such as satisfaction rating) is often used to supplement objective, verifiable information (such as financial numbers) in contracting. Empirical research finds that non-verifiable information can be used in contracting as a subjective performance measure or as subjective weighting on an objective performance measure. The differences between the two options have not yet been thoroughly explored analytically. This paper considers a multi-task setting where the non-verifiable performance signal provides incremental information about an aspect of the agent’s action. The research finds that when the agent has unlimited liability, both contracting schemes deliver the same payoff to the principal. However, the principal may strictly prefer a subjective weighting scheme in a setting where the agent has limited liability. 2016 Journal Article http://hdl.handle.net/20.500.11937/53650 10.4236/tel.2016.62026 http://creativecommons.org/licenses/by/4.0/ Scientific Research Publishing fulltext |
| spellingShingle | Adithipyangkul, Pattarin The use of non-verifialble information regarding the agent's action in compensation contracts |
| title | The use of non-verifialble information regarding the agent's action in compensation contracts |
| title_full | The use of non-verifialble information regarding the agent's action in compensation contracts |
| title_fullStr | The use of non-verifialble information regarding the agent's action in compensation contracts |
| title_full_unstemmed | The use of non-verifialble information regarding the agent's action in compensation contracts |
| title_short | The use of non-verifialble information regarding the agent's action in compensation contracts |
| title_sort | use of non-verifialble information regarding the agent's action in compensation contracts |
| url | http://hdl.handle.net/20.500.11937/53650 |