A Simulation Study of a Dynamic Process of an Agent's Effort Allocation under Informativeness and Controllability

Abstract

The purpose of this study, by using a computer simulation, is to examine the effect of informativeness and controllability on a dynamic process where an agent with limited rationality repetitively updates his/her effort level for doing a task under an optimized incentive plan, leading to an equilibrium in the end. The results show differences in the agent's effort level and the process of arriving at the equilibrium among the different combinations of the two characteristics of informativeness and controllability, and the significant effects of a feedback frequency on the number of steps until the agent does not change the effort level anymore.