What question did this study set out to answer?

Investigate why bonus pool arrangements are used, focusing on the role of information.

March 18, 2026

The Informational Advantages of Discretionary Bonus Schemes.

SBStanley BaimanUniversity of Pennsylvania MRMadhav V. RajanCouncil of Independent Colleges

Puntos clave

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.

Resumen

Abstract Explores a possible explanation for the observed use of bonus pool arrangements. Model illustrating optimal bonus arrangement; Use of non-contractible information.

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Cite This Study

Baiman et al. (Sun,) studied this question.

synapsesocial.com/papers/69ba422e4e9516ffd37a2315 https://doi.org/https://doi.org/10.2308/tar-9512014357

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