Our daughter is occasionally the subject of performance management - i.e. numerical targets for particular outcomes - especially around healthy foods. The other night she had a performance target to meet regarding the number of cucumbers on her plate that she was to eat. The reward for meeting the performance target was some treat or another.
Performance management is, of course, designed to (partially) solve principal agent problems, where in this case the principal is mom and the agent is our daughter. At some point during dinner, the principal left the room, at which point our daughter (but 4.5 years old) realized that she could alter her measured performance without changing her actual performance by engaging in strategic behavior. In particular, she picked up her cucumbers and carried them over to where I was sitting and put them into my salad, and then returned to her chair in time for mom's return to the room.
Imagine the warm glow in my cold economist heart.
You know, someone ought to write a book about all this.
It's really quite easy.
1 year ago