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Reporting Frequency and Substitutable Tasks

Author

Listed:
  • Christian Lukas

    (Department of Economics, University of Konstanz, Germany)

Abstract

The optimal reporting frequency is an important issue in accounting. In many production settings, substitution effects across periods occur. This paper shows that the optimal reporting frequency depends on the strength of the substitution effect and on the information content of performance signals. For a subset of parameter combinations - the low-chance scenario - infrequent reporting is always efficient; for other parameter combinations – the high-chance scenario - infrequent reporting is efficient as long as first-period signals show high informativeness (and substitution effects are strong). Limited commitment by the principal does not influence results.

Suggested Citation

  • Christian Lukas, 2010. "Reporting Frequency and Substitutable Tasks," Working Paper Series of the Department of Economics, University of Konstanz 2010-13, Department of Economics, University of Konstanz.
    • Handle: RePEc:knz:dpteco:1013
    as

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    File URL: http://www.uni-konstanz.de/FuF/wiwi/workingpaperseries/WP_Lukas-13-10.pdf
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    References listed on IDEAS

    as
    1. Gutiérrez Arnaiz, Óscar & Salas-Fumás, Vicente, 2008. "Performance standards and optimal incentives," Journal of Accounting and Economics, Elsevier, vol. 45(1), pages 139-152, March.
    2. Oliver Gürtler & Johannes Münster & Petra Nieken, 2013. "Information Policy in Tournaments with Sabotage," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(3), pages 932-966, July.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    dynamic agency; intertemporal aggregation; reporting frequency; performance measurement; substitubtable tasks; commitment;
    All these keywords.

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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