Sikdar, S (2016) Targets and resources: a screening perspective. Managerial and Decision Economics: the international journal of research and progress in management economics, 38 (4). pp. 471-489.

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Abstract

To secure funding for a project, an agent (informed about the project's type) announces a target output. The principal provides more generous resources for high targets but makes compensation tied to performance relative to the projection. The incentive mechanism is geared towards screening project/agent types for resource disbursement at the ex‐ante stage and motivating appropriate efforts at the interim stage. These dual objectives are embedded in an optimal share contract solution: a pair of startup funds and output share between the principal and agent. The target mechanism's performance is then assessed with respect to implementation of the optimal share contract solution. The focus is on linear contracts for their applicability and practical relevance.

Item Type: Article
Additional Information: This is the peer reviewed version of the following article: Sikdar, S., 2016. Targets and Resources: A Screening Perspective†. Managerial and Decision Economics: the international journal of research and progress in management economics, which has been published in final form at http://dx.doi.org/10.1002/mde.2798 This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions: Faculty of Humanities and Social Sciences > Keele Management School
Depositing User: Symplectic
Date Deposited: 07 Jun 2016 14:05
Last Modified: 12 Apr 2019 13:12
URI: http://eprints.keele.ac.uk/id/eprint/1818

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