Relative Performance Evaluation and the Ratchet Effect
研究了当目标依赖过去绩效时，棘轮效应会削弱激励，而引入同行绩效可缓解此问题。基于政府机构数据，发现同行质量越高，目标修订对同行绩效越敏感，对自身绩效越不敏感，从而减少棘轮效应。
ABSTRACT When targets depend on past performance, incentives are adversely affected by the ratchet effect. We provide theory and evidence that incorporating past peer performance into targets can alleviate this adverse incentive effect. In particular, we present an analytical model that characterizes optimal target revisions as a function of past own and past peer performance. We then test the predictions of our model using data on 2008–2010 performance targets from 354 units of a governmental agency responsible for reintegration of the long‐term unemployed into the labor market. As a unique feature of our data, we have information on peer group quality, defined as the extent to which peer performance is informative about common shocks. Consistent with our model, we find that higher peer group quality (a) increases sensitivity of target revisions to past peer performance, (b) reduces sensitivity of target revisions to past own performance, and (c) reduces the ratchet effect as reflected in managerial incentives to withhold end‐of‐year effort.