Performance Pay as a Screening Device

Marc C Chopin, C. T. Schulman

Research output: Contribution to journalReview article

1 Citation (Scopus)

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 languageEnglish (US)
Pages (from-to)94-108
Number of pages15
JournalStudies in Economics and Finance
Volume18
Issue number2
DOIs
StatePublished - Feb 1 1998
Externally publishedYes

Fingerprint

Screening
Performance pay
Managers
Productivity
Owners
Management compensation
Principal-agent problem
Separating equilibrium

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

Cite this

Performance Pay as a Screening Device. / Chopin, Marc C; Schulman, C. T.

In: Studies in Economics and Finance, Vol. 18, No. 2, 01.02.1998, p. 94-108.

Research output: Contribution to journalReview article

Chopin, Marc C ; Schulman, C. T. / Performance Pay as a Screening Device. In: Studies in Economics and Finance. 1998 ; Vol. 18, No. 2. pp. 94-108.
@article{e528ad9f980d4479ae3fee068ce9295a,
title = "Performance Pay as a Screening Device",
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.",
author = "Chopin, {Marc C} and Schulman, {C. T.}",
year = "1998",
month = "2",
day = "1",
doi = "10.1108/eb028744",
language = "English (US)",
volume = "18",
pages = "94--108",
journal = "Studies in Economics and Finance",
issn = "1086-7376",
publisher = "Emerald Group Publishing Ltd.",
number = "2",

}

TY - JOUR

T1 - Performance Pay as a Screening Device

AU - Chopin, Marc C

AU - Schulman, C. T.

PY - 1998/2/1

Y1 - 1998/2/1

N2 - 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.

AB - 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.

UR - http://www.scopus.com/inward/record.url?scp=38949166065&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=38949166065&partnerID=8YFLogxK

U2 - 10.1108/eb028744

DO - 10.1108/eb028744

M3 - Review article

VL - 18

SP - 94

EP - 108

JO - Studies in Economics and Finance

JF - Studies in Economics and Finance

SN - 1086-7376

IS - 2

ER -