Secure relative performance scheme

Abstract

We suggest a relative performance scheme that provides incentives for e.g. a manager to strive for the firm's strategy. A number of comparable firms submit private performance data to a trusted third party and receive a single number reflecting the firm's relative catch up with the frontier evaluated with the shadow prices associated with a tailored benchmark. The distributed information avoid signaling among the firms by revealing no recognizable information about the other firms performances. To enhance the applicability the computation of the required linear programming problems is based on distributed cryptography. Preliminary results on the computation time is provided. © Springer-Verlag Berlin Heidelberg 2007.