Learning to game the system

Li, J; Mukherjee, A; Vasconcelos, L

Learning to game the system

Li, J Mukherjee, A Vasconcelos, L

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Publisher:: Oxford University Press (OUP)
Publication Type:: Journal Article
Citation:: The Review of Economic Studies, 2020
Issue Date:: 2020-10-14

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Field	Value	Language
dc.contributor.author	Li, J
dc.contributor.author	Mukherjee, A
dc.contributor.author	Vasconcelos, L
dc.date.accessioned	2020-11-27T04:20:44Z
dc.date.available	2020-11-27T04:20:44Z
dc.date.issued	2020-10-14
dc.identifier.citation	The Review of Economic Studies, 2020
dc.identifier.issn	0034-6527
dc.identifier.issn	1467-937X
dc.identifier.uri	http://hdl.handle.net/10453/144420
dc.description.abstract	<jats:title>Abstract</jats:title> <jats:p>An agent may privately learn which aspects of his job are more important by shirking on some of them, and use that information to shirk more effectively in the future. In a model of long-term employment relationship, we characterize the optimal relational contract in the presence of such learning-by-shirking and highlight how the performance measurement system can be managed to sharpen incentives. Two related policies are studied: intermittent replacement of existing measures, and adoption of new ones. In spite of the learning-by-shirking effect, the optimal contract is stationary, and may involve stochastic replacement/adoption policies that dilute the agent’s information rents from learning how to game the system.</jats:p>
dc.language	en
dc.publisher	Oxford University Press (OUP)
dc.relation.ispartof	The Review of Economic Studies
dc.relation.isbasedon	10.1093/restud/rdaa065
dc.rights	info:eu-repo/semantics/embargoedAccess
dc.rights	This is a pre-copyedited, author-produced version of an article accepted for publication in [The Review of Economic Studies] following peer review. The version of record [The Review of Economic Studies, 2020] is available online at: https://academic.oup.com/restud/advance-article-abstract/doi/10.1093/restud/rdaa065/5923306?redirectedFrom=fulltext].
dc.subject	14 Economics
dc.subject.classification	Economics
dc.title	Learning to game the system
dc.type	Journal Article
utslib.for	14 Economics
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Economics Discipline
pubs.organisational-group	/University of Technology Sydney
utslib.copyright.status	open_access	*
utslib.copyright.embargo	2022-10-14T00:00:00+1000Z
dc.date.updated	2020-11-27T04:20:37Z
pubs.publication-status	Published online

Abstract:

Abstract An agent may privately learn which aspects of his job are more important by shirking on some of them, and use that information to shirk more effectively in the future. In a model of long-term employment relationship, we characterize the optimal relational contract in the presence of such learning-by-shirking and highlight how the performance measurement system can be managed to sharpen incentives. Two related policies are studied: intermittent replacement of existing measures, and adoption of new ones. In spite of the learning-by-shirking effect, the optimal contract is stationary, and may involve stochastic replacement/adoption policies that dilute the agent’s information rents from learning how to game the system.

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http://hdl.handle.net/10453/144420