Rewarding Failure

Kuvalekar, A and Ravi, N (2019) Rewarding Failure. Working Paper. SSRN.

Full text not available from this repository. (Request a copy)

Abstract

We explore when and how to reward failure in a dynamic principal-agent relationship with experimentation. The agent receives flow rents from experimentation, and divides his time between searching for evidence of success and failure about the underlying project. The principal commits in advance to rewards conditional on the type of evidence. At each instant, the principal makes a firing decision. We show that the principal’s optimal equilibrium features a stark reward structure—either the principal does not reward failure at all or rewards success and failure equally.

Affiliation: Indian School of Business
ISB Creiators:
ISB Creators
ORCiD
Ravi, N
UNSPECIFIED
Item Type: Monograph (Working Paper)
Additional Information: The research paper was published by the author with the affiliation of University of Pennsylvania.
Uncontrolled Keywords: Dynamic Agency, Experimentation
Subjects: Economics
Depositing User: Gurusrinivasan K
Date Deposited: 09 May 2021 05:51
Last Modified: 09 May 2021 05:51
URI: https://eprints.exchange.isb.edu/id/eprint/1473
Publisher URL: https://dx.doi.org/10.2139/ssrn.3281644
Publisher OA policy: https://dx.doi.org/10.2139/ssrn.3281644
Related URLs:

Actions (login required)

View Item View Item
Statistics for DESI ePrint 1473 Statistics for this ePrint Item