Motivational Ratings

Johannes Hörner and Nicolas Lambert
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Johannes Hörner: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: Performance evaluation ("rating") systems not only provide information to users but also motivate the rated worker. This article solves for the optimal (effort-maximizing) rating within the standard career concerns framework. We prove that this rating is a linear function of past observations. The rating, however, is not a Markov process, but rather the sum of two Markov processes. We show how it combines information of different types and vintages. An increase in effort may adversely affect some (but not all) future ratings.

Keywords: Career concerns; Mechanism design; Ratings (search for similar items in EconPapers)
Date: 2021-07
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Published in Review of Economic Studies, 2021, 88 (4), pp.1892-1935. ⟨10.1093/restud/rdaa070⟩

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Related works:
Journal Article: Motivational Ratings (2021)
Working Paper: Motivational Ratings (2021)
Working Paper: Motivational Ratings (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03759599

DOI: 10.1093/restud/rdaa070

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