Performance Pay as a Screening Device

M. C. Chopin; C. T. Schulman

doi:10.1108/eb028744

Performance Pay as a Screening Device

M. C. Chopin, C. T. Schulman

Business, The W.A. Franke College of (CoB)

Research output: Contribution to journal › Review article › peer-review

1 Scopus citations

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.

Original language	English (US)
Pages (from-to)	94-108
Number of pages	15
Journal	Studies in Economics and Finance
Volume	18
Issue number	2
DOIs	https://doi.org/10.1108/eb028744
State	Published - Feb 1 1998

ASJC Scopus subject areas

General Economics, Econometrics and Finance

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10.1108/eb028744

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Performance Pay as a Screening Device

Abstract

ASJC Scopus subject areas

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