Working Paper: CEPR ID: DP3164
Authors: Pascal Courty; Gerald Marschke
Abstract: This Paper studies a particular kind of gaming response to explicit incentives in a large government organization. The gaming responses we consider occur when agents strategically report their performance outcomes to maximize their awards. An important contribution of this work is to examine whether this behaviour diverts resources (eg agents' time) from productive activities or whether it simply reflects an accounting phenomenon. We evaluate the efficiency impact of the behaviour we identify and find that it has a negative impact on the true goal of the organization.
Keywords: contract theory; government incentives; moral hazard; multitasking; performance incentives
JEL Codes: J33; L14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Performance Incentives (J33) | Gaming Responses (C72) |
| Gaming Responses (C72) | Organizational Goals (L21) |
| Performance Incentives (J33) | Organizational Goals (L21) |