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Ranjani Krishnan
Financial economicsAmbiguity aversionPerformance measurementProbability distributionAmbiguity
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#1Ge BaiH-Index: 10
We distinguish ambiguous common uncertainty (with unknown probability distribution) from risky common uncertainty (with known probability distribution) and examine how employee preference for relative performance contracts differs between the two conditions. Using economics and psychology theory in decision making under uncertainty, we hypothesize that (i) preference for relative performance contracts is low (high) when common uncertainty is ambiguous (risky); and (ii) confidence mediates the re...
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