"Today, I know better. As I will try to explain, one of the main lessons from working on incentive problems for 25 years is that within firms, high-powered financial incentives can be very dysfunctional and attempts to bring the market inside the firm are generally misguided. Typically, it is best to avoid high-powered incentives and sometimes not use pay-for-performance at all."
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Academics from FinlandNobel laureates in EconomicsFinland-SwedesEconomists from FinlandBusiness theorists from France
Original Language: English
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Bengt Holmström (2021) cited in: "Past masters of contract theory" in Millenium Post, 5 December 2021.
https://en.wikiquote.org/wiki/Bengt_Holmstr%C3%B6m
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Bengt Holmström
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