Optimal contracts based on subjective performance evaluations and reciprocity

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Optimal contracts based on subjective performance evaluations and reciprocity. / Sebald, Alexander Christopher; Walzl, Markus.

I: Journal of Economic Psychology, Bind 47, 2015, s. 62–76.

Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt

Harvard

Sebald, AC & Walzl, M 2015, 'Optimal contracts based on subjective performance evaluations and reciprocity', Journal of Economic Psychology, bind 47, s. 62–76. https://doi.org/10.1016/j.joep.2015.01.004

APA

Sebald, A. C., & Walzl, M. (2015). Optimal contracts based on subjective performance evaluations and reciprocity. Journal of Economic Psychology, 47, 62–76. https://doi.org/10.1016/j.joep.2015.01.004

Vancouver

Sebald AC, Walzl M. Optimal contracts based on subjective performance evaluations and reciprocity. Journal of Economic Psychology. 2015;47:62–76. https://doi.org/10.1016/j.joep.2015.01.004

Author

Sebald, Alexander Christopher ; Walzl, Markus. / Optimal contracts based on subjective performance evaluations and reciprocity. I: Journal of Economic Psychology. 2015 ; Bind 47. s. 62–76.

Bibtex

@article{d708d8dbf0be44bba0e7e0510787ada5,
title = "Optimal contracts based on subjective performance evaluations and reciprocity",
abstract = "As demonstrated in a recent laboratory experiment (see Sebald & Walzl, 2014), individuals tend to sanction others who subjectively evaluate their performance whenever this assessment falls short of the individuals{\textquoteright} self-evaluation. Interestingly, this is the case even if the individuals{\textquoteright} earnings are unaffected by the subjective performance appraisal. Hence, performance feedback which falls short of agents{\textquoteright} self- evaluations can be interpreted as an unkind act that triggers a negatively reciprocal response not only if the assessment determines agents{\textquoteright} earnings but also when it lacks monetary consequences. We propose a principal-agent model formalizing that agents might engage into conflict in response to ego-threatening performance appraisals and show that these conflicts stabilize principal-agent relationships based on subjective performance evaluations. In particular, we identify conditions for a positive welfare effect of increasing costs of conflict and a negative welfare effect of more capable agents.",
keywords = "Faculty of Social Sciences, Contracts, Subjective evaluations , Self-esteem , Ego-threats , Reciprocity",
author = "Sebald, {Alexander Christopher} and Markus Walzl",
note = "JEL classification: D01, D02, D82, D86, J41",
year = "2015",
doi = "10.1016/j.joep.2015.01.004",
language = "English",
volume = "47",
pages = "62–76",
journal = "Journal of Economic Psychology",
issn = "0167-4870",
publisher = "Elsevier",

}

RIS

TY - JOUR

T1 - Optimal contracts based on subjective performance evaluations and reciprocity

AU - Sebald, Alexander Christopher

AU - Walzl, Markus

N1 - JEL classification: D01, D02, D82, D86, J41

PY - 2015

Y1 - 2015

N2 - As demonstrated in a recent laboratory experiment (see Sebald & Walzl, 2014), individuals tend to sanction others who subjectively evaluate their performance whenever this assessment falls short of the individuals’ self-evaluation. Interestingly, this is the case even if the individuals’ earnings are unaffected by the subjective performance appraisal. Hence, performance feedback which falls short of agents’ self- evaluations can be interpreted as an unkind act that triggers a negatively reciprocal response not only if the assessment determines agents’ earnings but also when it lacks monetary consequences. We propose a principal-agent model formalizing that agents might engage into conflict in response to ego-threatening performance appraisals and show that these conflicts stabilize principal-agent relationships based on subjective performance evaluations. In particular, we identify conditions for a positive welfare effect of increasing costs of conflict and a negative welfare effect of more capable agents.

AB - As demonstrated in a recent laboratory experiment (see Sebald & Walzl, 2014), individuals tend to sanction others who subjectively evaluate their performance whenever this assessment falls short of the individuals’ self-evaluation. Interestingly, this is the case even if the individuals’ earnings are unaffected by the subjective performance appraisal. Hence, performance feedback which falls short of agents’ self- evaluations can be interpreted as an unkind act that triggers a negatively reciprocal response not only if the assessment determines agents’ earnings but also when it lacks monetary consequences. We propose a principal-agent model formalizing that agents might engage into conflict in response to ego-threatening performance appraisals and show that these conflicts stabilize principal-agent relationships based on subjective performance evaluations. In particular, we identify conditions for a positive welfare effect of increasing costs of conflict and a negative welfare effect of more capable agents.

KW - Faculty of Social Sciences

KW - Contracts

KW - Subjective evaluations

KW - Self-esteem

KW - Ego-threats

KW - Reciprocity

U2 - 10.1016/j.joep.2015.01.004

DO - 10.1016/j.joep.2015.01.004

M3 - Journal article

VL - 47

SP - 62

EP - 76

JO - Journal of Economic Psychology

JF - Journal of Economic Psychology

SN - 0167-4870

ER -

ID: 132046136