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# ADEclass22_10-11_72 - Session#22 Outline Incentives Optimal...

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Session #22 Outline: Incentives: Optimal selection of performance measures (recap) Implicit incentives resentations: incentives at Goldman Sachs Presentations: incentives at Goldman Sachs

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Groups working on segment 4 . Assignment: November 29 . Presentation: December 1. Groups working on segment 5 . Start reading: Besanko, chapters 3 and 4. Topics: December 1. Assignment: December 10 Presentation: December 13.
For next two sessions: Readings: Besanko 73-101 and 174-185 . Make sure you read these parts . In class, we will just discuss the main ideas and en move on to the case studies. then move on to the case studies. Problem set 5, part 2 .

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Tomorrow, last day to tell me if you will not be able to take the exam on the scheduled date: January 12, 2011. xtra session: Friday Dec. 3, 12:30 3:30 Extra session: Friday Dec. 3, 12:30-13:30 No new material Review of problem set 5 / incentives
Session #22 Outline: Incentives: Optimal selection of performance measures (recap) Implicit incentives resentations: incentives at Goldman Sachs Presentations: incentives at Goldman Sachs

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Optimal selection of performance measures Recap: How to determine performance measures : 1. Risk : Informativeness principle : design the erformance measure to reduce as much as performance measure to reduce as much as possible its noise ( b reduce the risk the agent has to bear) : Use variables that are correlated with the random component of the performance measure and, thus, can reduce the noise of the performance measure Sales of other agents, measures of demand,…
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ADEclass22_10-11_72 - Session#22 Outline Incentives Optimal...

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