EC4 Flashcards
1
Q
Senstiviy;
A
the extend to which the expected value of the pm changes with changes in the agents effort
2
Q
Precision
A
The extend to which the expected value of the pm is influenced outside of the control of the manager
3
Q
Verifiability:
A
To which extent is ex ante clear how the performance measure is calculated
4
Q
congruence
A
The extent to which the pm reflects contribution to overall firm value.
5
Q
Incentive effect of promotion:
A
a higher change on promotion leads to an increase in effect of the employee
6
Q
Intertemporal choice problem:
A
Managers have a high preference for action from which the benefits are realized at shorter term
7
Q
A
