Our paper evaluates recent regulatory proposals mandating the deferral of bonus payments and claw-back clauses in the financial sector. We study a broadly applicable principal agent setting, in which the agent exerts effort for an immediately observable task (acquisition) and a task for which...

Angesichts des kürzlich von der Bundesregierung verabschiedeten Konjunkturpakets, stellen sich die Autoren des Policy Letters die Frage, ob und inwieweit die angekündigte Mehrwertsteuersenkung sowie der Kinderbonus zur substantiellen Ankurbelung des Binnenkonsums führt. Aus den für das...

This paper provides a complete characterization of optimal contracts in principal-agent settings where the agent's action has persistent effects. We model general information environments via the stochastic process of the likelihood-ratio. The martingale property of this performance metric...

This paper provides a complete characterization of optimal contracts in principal-agent settings where the agent's action has persistent effects. We model general information environments via the stochastic process of the likelihood-ratio. The martingale property of this performance metric...

Angesichts des kürzlich von der Bundesregierung verabschiedeten Konjunkturpakets, stellen sich die Autoren des Policy Letters die Frage, ob und inwieweit die angekündigte Mehrwertsteuersenkung sowie der Kinderbonus zur substantiellen Ankurbelung des Binnenkonsums führt. Aus den für das...

Why do retail investors trade? To analyze the impact of professional advice on trading, we combine administrative and survey data from a large German bank. Investors who report that they always rely on their advisor's recommendations have a 25-percent-higher trading volume. Also, for investors...

This paper proposes an indirect tax approach to derive positive and normative implications of regulatory interference in compensation contracts, focusing on recent mandatory deferral and clawback requirements in the financial sector. Moderate deferral requirements for bonus-pay typically lead to...

This paper characterizes optimal compensation contracts in principal-agent settings where the agent's action has persistent effects. As additional informative signals arrive over time, deferred compensation has the benefit of exploiting better performance measurement which, for any information...