Kim, Jaesoo2016-03-312016-03-312015-11Kim, J. (2015). Managerial beliefs and incentive policies. Journal of Economic Behavior & Organization, 119, 84–95. http://doi.org/10.1016/j.jebo.2015.08.001https://hdl.handle.net/1805/9121This article examines incentive contracts under moral hazard when a principal and agents disagree about the likelihood that a task will succeed. The direction of disagreement alters the effectiveness of monetary incentives. The principal's optimal contract is a relative performance evaluation when she is more optimistic than the agents, and a joint performance evaluation when she is less optimistic. We further show why disagreement may prevail in organizations by considering a simple job assignment problem.en-USPublisher PolicyincentivescontractsdisagreementsArticle