Citation

Discussion Paper Details

Please find the details for DP6911 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Multitasking, Quality and Pay for Performance

Author(s): Oddvar Martin Kaarboe and Luigi Siciliani

Publication Date: July 2008

Keyword(s): altruism, pay for performance and quality

Programme Area(s): Industrial Organization

Abstract: We present a model of optimal contracting between a purchaser and a provider of health services when quality has two dimensions. We assume that one dimension of quality is verifiable (dimension 1) and one dimension is not verifiable (dimension 2). We show that the power of the incentive scheme for the verifiable dimension depends critically on the extent to which quality 1 increases or decreases the provider's marginal disutility and the patients' marginal benefit from quality 2 (i.e. substitutability or complementarity). Our main result is that under some circumstances a high-powered incentive scheme can be optimal even when the two quality dimensions are substitutes.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=6911

Bibliographic Reference

Kaarboe, O and Siciliani, L. 2008. 'Multitasking, Quality and Pay for Performance'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=6911