Dur, Robert; Tichem, Jan - Institute for the Study of Labor (IZA) - 2013
This paper studies how altruism between managers and employees affects relational incentive contracts. To this end we … develop a simple dynamic principal-agent model where both players may have feelings of altruism or spite toward each other … that altruism undermines the credibility of a threat of dis- missal but strengthens the credibility of a bonus. Among …