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...ative performance evaluation is its risk-filtering property. This property is better understood when comparing relative performance evaluation to independent contracts or individual piece-rates (e.g. =-=Lazear and Rosen, 1981-=-) in a context when agents are risk-averse. When a common noise influences the performance of the two agents, the principal can use the output of one agents to at least partially correct for the commo...

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...since an agent can not influence the other’s result in this model beyond his single effort choice. Accounting for wider possibilities would require to enrich the action space to account for sabotage (=-=Lazear, 1989-=-) or help (Itoh, 1991). Note also that JPE and RPE raise different collusion issues, see Brusco (1997) for a general approach to collusion. 6 2.3 Implementation and toolbox As already mentioned, it is...

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...noulli parameters have two points supports. 11 This is the most general form of imperfect knowledge one can introduce in the present setting. It is related to recent ideas in modelling ambiguity (see =-=Klibanoff et al., 2005-=-). Note that the correlation coefficients pertain to the beliefs on the distribution of results but, as is shown below, it also represents the correlation between outcomes . How ever intuitive lemma 2...

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...First, in a setting with one single agent and binary outcomes, these two concepts are trivial, but they make sense when the outcome space in richer, as with multiple agents or additional signals (see =-=Laffont and Martimort, 2002-=-, pp. 167-172). Second, note that a result R is more informative than a result R′ if and only if the associated wage wR is more incentive efficient than wR′ . In other words, it is equivalent to reaso...

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...ormational structures and technologies (e.g. Maskin et al., 2000; Che and Yoo, 2001; Luporini, 2006) and/or restricted contract forms (e.g. Holmström and Milgrom, 1990; Ramakrishnan and Takor, 1991; =-=Itoh, 1992-=-). The setting analyzed in the following contributes to filling this gap by providing a framework that generalizes the informational structure in two directions,2 while still allowing for a full chara...

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...c consider rather specific informational structures and technologies (e.g. Maskin et al., 2000; Che and Yoo, 2001; Luporini, 2006) and/or restricted contract forms (e.g. Holmström and Milgrom, 1990; =-=Ramakrishnan and Takor, 1991-=-; Itoh, 1992). The setting analyzed in the following contributes to filling this gap by providing a framework that generalizes the informational structure in two directions,2 while still allowing for ...

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...influence the other’s result in this model beyond his single effort choice. Accounting for wider possibilities would require to enrich the action space to account for sabotage (Lazear, 1989) or help (=-=Itoh, 1991-=-). Note also that JPE and RPE raise different collusion issues, see Brusco (1997) for a general approach to collusion. 6 2.3 Implementation and toolbox As already mentioned, it is assumed that the pri...

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... and η are random variable with means 1, variances σ2 and correlation ρ. This functional form of uncertainty is used as an example in Holmström (1982) and appears also in career concerns model (e.g. =-=Dewatripont et al., 1999-=-). Note that all pairs ( p̃e, q̃ f ) have the same correlation ρ, so that ρ11ρ01 = 1. In addition we have σ0 = τ0 = r0σε and σ1 = τ1 = r1σε. Thus IPE is an optimal scheme in that case (but not the uni...

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...sirability of competition in teams, and on the other hand, works focused on that topic consider rather specific informational structures and technologies (e.g. Maskin et al., 2000; Che and Yoo, 2001; =-=Luporini, 2006-=-) and/or restricted contract forms (e.g. Holmström and Milgrom, 1990; Ramakrishnan and Takor, 1991; Itoh, 1992). The setting analyzed in the following contributes to filling this gap by providing a f...