The rewards received by financial managers depend on both relative performance (e.g., fund inflows based on fund rankings, promotions based on peer comparisons) and absolute performance (e.g., bonus payments for meeting accounting targets, hedge-fund incentive fees). Both relative and absolute performance rewards engender risk-taking. In this paper, we show that these two sources of risk-taking, relative and absolute performance rewards, mitigate the risk-taking incentives produced by the other. This mutual incentive-reduction effect generates a number of novel predictions about the relationship of managerial risk-taking with the structure of relative and absolute performance rewards.

中文翻译：

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中庸之道：将锦标赛奖励与高强度激励相结合的风险缓解效果

财务经理获得的奖励取决于相对绩效（例如，基于基金排名的资金流入、基于同行比较的晋升）和绝对绩效（例如，为达到会计目标而支付的奖金、对冲基金激励费）。相对和绝对绩效奖励都会产生冒险。在本文中，我们表明这两种风险承担来源，相对和绝对绩效奖励，减轻了另一个产生的风险承担激励。这种相互激励减少效应产生了许多关于管理风险承担与相对和绝对绩效奖励结构之间关系的新预测。