Financial incentives and loan officer behaviormultitasking and allocation of effort under an incomplete contract

Resumo

We investigate the implications of providing loan officers with a compensation structure that rewards loan volume and penalizes poor performance. Using a unique data set provided by a large international commercial bank, we examine the three main activities that loan officers perform: monitoring, origination, and screening. We find that when loan officers are at risk of losing their bonus, they increase monitoring and origination, but not screening effort. On the other hand, having lost a bonus in the previous period does not entail higher effort. We document unintended consequences of the incentive contract showing the incompleteness of such contracts.

Ficha do documento

Tipo

Outro

Ano

2015

Instituição

EBAPE - Escola Brasileira de Administração Pública e de Empresas

Fonte

Repositório da FGV

Idioma

Inglês

Acesso

Não informado

Identificador

oai:repositorio.fgv.br:10438/17814

Temas

Administração Pública

Palavras-chave

Loan officerIncentivesMonitoringScreeningLoan originationAdministração públicaInvestimentos - Incentivos fiscaisEmpréstimosContratos