Investigate why bonus pool arrangements are used, focusing on the role of information.
Develop a model to illustrate optimal bonus arrangements.
Analyze the use of non-contractible information in these schemes.
Demonstrates that discretionary bonuses improve decision-making incentives.
Highlights advantages of flexible bonus structures over fixed arrangements.
Abstract
Abstract Explores a possible explanation for the observed use of bonus pool arrangements. Model illustrating optimal bonus arrangement; Use of non-contractible information.