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    Rights statement: This is the peer reviewed version of the following article:Rietzke, D. and Chen, Y. (2020), Push or pull? Performance‐pay, incentives, and information. The RAND Journal of Economics. doi:10.1111/1756-2171.12314 which has been published in final form at https://onlinelibrary.wiley.com/doi/full/10.1111/1756-2171.12314 This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.

    Accepted author manuscript, 355 KB, PDF document

    Embargo ends: 4/03/22

    Available under license: CC BY-NC: Creative Commons Attribution-NonCommercial 4.0 International License

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Push or Pull?: Performance-Pay, Incentives, and Information

Research output: Contribution to journalJournal articlepeer-review

Published
<mark>Journal publication date</mark>20/03/2020
<mark>Journal</mark>RAND Journal of Economics
Issue number1
Volume51
Number of pages17
Pages (from-to)301-317
Publication StatusPublished
Early online date4/03/20
<mark>Original language</mark>English

Abstract

We study a principal‐agent model wherein the agent is better informed of the prospects of the project, and the project requires both an observable and unobservable input. We characterize the optimal contracts, and explore the trade‐offs between high‐ and low‐powered incentive schemes. We discuss the implications for push and pull programs used to encourage Research and Development (R&D) activity, but our results are relevant in other contexts.

Bibliographic note

This is the peer reviewed version of the following article:Rietzke, D. and Chen, Y. (2020), Push or pull? Performance‐pay, incentives, and information. The RAND Journal of Economics. doi:10.1111/1756-2171.12314 which has been published in final form at https://onlinelibrary.wiley.com/doi/full/10.1111/1756-2171.12314 This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.