American Economic Journal Microeconomics · 2015 · 53 citations · 15 references
BusinessBusiness EconomicsQuality ManagementCorporate DisclosureCorporate ReportingIncentive SystemsCorporate TransparencyDisclosureDisclosure TheoryInformation AsymmetryInternal ReportingInternal Reporting SystemsEmployee Disclosure BehaviorInformation Disclosure IncentivesInformation Quality IncentivesInternal Reporting IncentivesPerformance Information DisclosureProduct Quality MonitoringTiming Of Disclosure IncentivesTransparency In Corporate Reporting
Disclosure programs exist in many industries in which consumers are poorly informed about product quality. We study a disclosure program for airline on-time performance, which ranks airlines based on the fraction of their flights that arrive less than 15 minutes late. The program creates incentives for airlines to focus their efforts on flights close to this threshold. We find that firms in this industry are heterogeneous in how they respond to these incentives. Moreover, this heterogeneity correlates with internal firm characteristics. Our findings highlight the importance of interactions between incentives created by a disclosure program and firms' internal organizational practices. (JEL D22, L15, L25, L93)
15
On the Folly of Rewarding A, While Hoping for B.
S. Kerr · Academy of Management Journal · 1975 · 1.6K citations