Gaming and strategic opacity in incentive provision.

We study the benefits and costs of "opacity" (deliberate lack of transparency) of incentive schemes as a strategy to combat gaming by better informed agents. In a two‐task moral hazard model in which only the agent knows which task is less costly, the agent has an incentive to focus his effort on th...

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Publicado en:RAND Journal of Economics (Wiley-Blackwell) Vol. 49; no. 4; pp. 819 - 855
Autores principales: Ederer, Florian, Holden, Richard, Meyer, Margaret
Formato: Artículo
Publicado: Wiley-Blackwell Winter2018
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: Gaming and strategic opacity in incentive provision.
      aug:
        au:
          Ederer, Florian
          Holden, Richard
          Meyer, Margaret
        affil:
          Yale University
          University of New South Wales
          Oxford University and CEPR
      su:
        Organizational transparency
        Risk aversion
        Gambling industry
        Labor incentives
        Gambling taxes
      sug:
        subj:
          Organizational transparency
          Risk aversion
          Other Gambling Industries
          Casinos (except Casino Hotels)
          All other gambling industries
          Gambling industry
          Labor incentives
          Gambling taxes
      ab: We study the benefits and costs of "opacity" (deliberate lack of transparency) of incentive schemes as a strategy to combat gaming by better informed agents. In a two‐task moral hazard model in which only the agent knows which task is less costly, the agent has an incentive to focus his effort on the less costly task. Opaque schemes, which make a risk‐averse agent uncertain about which task will be more highly rewarded, mitigate such gaming but impose more risk. We identify environments in which opaque schemes not only dominate transparent ones, but also eliminate the costs of the agent's hidden information.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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