Show simple item record

dc.contributor.authorFOSCHI, Matteo
dc.contributor.authorSANTOS-PINTO, Luís Pedro
dc.date.accessioned2017-10-17T12:34:25Z
dc.date.available2017-10-17T12:34:25Z
dc.date.issued2017
dc.identifier.issn1725-6704
dc.identifier.urihttps://hdl.handle.net/1814/48485
dc.description.abstractThis paper analyses how worker optimism (and pessimism) affects subjective performance evaluation (SPE) contracts. We let an optimistic (pessimistic) worker overestimate (underestimate) the probability of observing an acceptable performance. The firm is better informed about performance than the worker and knows the worker's bias. We show that optimism (and pessimism): i) changes the optimal incentive scheme under SPE, ii) lowers the deadweight loss associated with SPE contracts, iii) can lead to a Pareto improvement by simultaneously lowering the firm's expected wage cost and raising the worker's expected compensation. In addition, we show that worker pessimism can lead to SPE contracts without a deadweight loss, in contrast to the standard case in the literature.en
dc.format.mimetypeapplication/pdfen
dc.language.isoenen
dc.relation.ispartofseriesEUI ECOen
dc.relation.ispartofseries2017/08en
dc.rightsinfo:eu-repo/semantics/openAccessen
dc.subjectOptimismen
dc.subjectOverconfidenceen
dc.subjectContracten
dc.subjectMoral hazarden
dc.subjectBiased beliefsen
dc.subjectD82en
dc.subjectD84en
dc.subjectD86en
dc.subjectJ41en
dc.subjectJ7en
dc.titleSubjective performance evaluation of employees with biased beliefsen
dc.typeWorking Paperen


Files associated with this item

Icon

This item appears in the following Collection(s)

Show simple item record