Pay For Performance In NBA Teams:

This study tests the agency theory in the context of pay for performance in the National Basketball Association and finds that team managers use payoff as a tool to mitigate their agency cost.I use two different types of statistic to measure performance,namely traditional and analytical,and find significant positive relationship of both on team's payoff,albeit with analytical stats having slightly higher economic significance.This suggests that analytical stats are more accurate measures of performances over traditional stats.