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| Volume 6, No. 1,
April 2007 |
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Performance Measurement
Technologies and the Trade-off of Risk and Incentives |
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Oliver Gürtler |
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Department of Economics,
University of Bonn, Germany |
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| Abstract |
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This paper analyzes a principal's
decision of when to invest in a performance measurement technology.
Interestingly, higher risk may make such an investment less likely.
In this case, the strength of incentives certainly decreases. If,
however, an increase in risk induces an initially non-investing
principal to invest, incentive strength may increase. |
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Key words:
complements; risk; incentive strength; performance
measurement system |
| JEL
classification:
D81; J33; M52 |
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