@article{6bb6f60d57434809b0895a366218bf9b,
title = "Performance cycles",
abstract = "A decision maker repeatedly exerts efforts to produce new outputs, while being compensated based on his past and current production levels. We show that the decision maker{\textquoteright}s optimal strategy dictates a cyclic oscillatory performance whenever the compensation depends on recent past performance. We apply our model to various economic settings such as the delegated portfolio-managers problem, an R &D investment problem, and a dynamic advertising problem.",
keywords = "Dynamic optimization, Performance cycles, Performance persistence",
author = "David Lagziel and Ehud Lehrer",
note = "Funding Information: The authors wish to thank Eddie Dekel, Zvika Neeman, Dotan Persitz, David Schmeidler, Eilon Solan, and Avi Wohl for their valuable comments; as well as the participants of the ninth edition of the UECE Lisbon Meetings, the 29th Stony Brook Game-Theory conference, the Bar-Ilan University Economics Seminar, and the 10th annual Israeli Game-Theory conference. Lagziel acknowledges the support of the Israel Science Foundation, Grant #513/19. Publisher Copyright: {\textcopyright} 2023, The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.",
year = "2023",
month = jan,
day = "1",
doi = "10.1007/s00199-023-01516-x",
language = "English",
journal = "Economic Theory",
issn = "0938-2259",
publisher = "Springer New York",
}
