Motivational Ratings
Economics
Speaker: | Johannes Hörner, Toulouse School of Economics |
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Date: | Friday 2 March 2018 |
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Time: | 3.30pm |
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Location: | Kolade Teaching Room, Building One |
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Further details
Performance evaluation (“rating”) systems not only provide information to
users but also motivate the rated worker. This paper solves for the optimal
(effort-maximizing) system within the standard career concerns framework. It
is a mixture two-state Markov system. That is, it is the sum of two Markov
processes, with one that reflects the belief of the rater and the other the
preferences of the worker. The rating, however, is not a Markov process. Our
analysis shows how the rating combines information of different types and
vintages. In particular,an increase in effort may adversely affect some (but not all) future ratings.