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Why organizations fail: models and cases
Garicano, Luis; Rayo, Luis - C.E.P.R. Discussion Papers - 2015
Organizations fail due to incentive problems (agents do not want to act in the organization's interests) and bounded rationality problems (agents do not have the necessary information to do so). This survey uses recent advances in organizational economics to illuminate organizational failures...
Persistent link: https://www.econbiz.de/10011165668
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Ethnic Identity and Social Distance in Friendship Formation
De Martí, Joan; Zenou, Yves - C.E.P.R. Discussion Papers - 2009
the same type of agents might be weak even if the within-type link cost is very low; (ii) oppositional identity patterns …
Persistent link: https://www.econbiz.de/10008491722
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Incentives and Prosocial Behaviour
Bénabou, Roland; Tirole, Jean - C.E.P.R. Discussion Papers - 2004
We build a theory of prosocial behaviour that combines heterogeneity in individual altruism and greed with concerns for social reputation or self-respect. The presence of rewards or punishments creates doubt as to the true motive for which good deeds are performed, and this ‘overjustification...
Persistent link: https://www.econbiz.de/10005498047
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Culture, Ethnicity and Diversity
Desmet, Klaus; Ortuño-Ortín, Ignacio; Wacziarg, Romain - C.E.P.R. Discussion Papers - 2015
, attitudes and preferences. Using surveys of individual values in 76 countries, we find that ethnic identity is a significant …
Persistent link: https://www.econbiz.de/10011186625
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Taboos: Considering the Unthinkable
Fershtman, Chaim; Gneezy, Uri; Hoffman, Moshe - C.E.P.R. Discussion Papers - 2008
in which taboos are part of the definition of one's identity. Deliberating over breaking the taboo adds the action to the … individual’s choice set and provides information on possible private benefits but is costly because it contradicts one's identity … varying strengths of taboos. Having such a choice defines an evolutionary process with respect to identity: Some identities …
Persistent link: https://www.econbiz.de/10005791808
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Use and Abuse of Authority: A Behavioral Foundation of the Employment Relation
Bartling, Björn; Fehr, Ernst; Schmidt, Klaus M. - C.E.P.R. Discussion Papers - 2012
Employment contracts give a principal the authority to decide flexibly which task his agent should execute. However, there is a tradeoff, first pointed out by Simon (1951), between flexibility and employer moral hazard. An employment contract allows the principal to adjust the task quickly to...
Persistent link: https://www.econbiz.de/10011084462
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The Generalized Informativeness Principle
Chaigneau, Pierre; Edmans, Alex; Gottlieb, Daniel - C.E.P.R. Discussion Papers - 2014
This paper shows that the informativeness principle, as originally formulated by Holmstrom (1979), does not hold if the first-order approach is invalid. We introduce a "generalized informativeness principle" that takes into account non-local incentive constraints and holds generically, even...
Persistent link: https://www.econbiz.de/10011096100
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Contracting With Synergies
Edmans, Alex; Goldstein, Itay; Zhu, John - C.E.P.R. Discussion Papers - 2013
This paper studies multi-agent optimal contracting with cost synergies. We model synergies as the extent to which effort by one agent reduces his colleague's marginal cost of effort. An agent's pay and effort depend on the synergies he exerts, the synergies his colleagues exert on him and,...
Persistent link: https://www.econbiz.de/10011083428
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The Informativeness Principle Under Limited Liability
Chaigneau, Pierre; Edmans, Alex; Gottlieb, Daniel - C.E.P.R. Discussion Papers - 2014
This paper shows that the informativeness principle does not automatically extend to settings with limited liability. Even if a signal is informative about effort, it may have no value for contracting. An agent with limited liability is paid zero for certain output realizations. Thus, even if...
Persistent link: https://www.econbiz.de/10011083536
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The Value of Informativeness for Contracting
Chaigneau, Pierre; Edmans, Alex; Gottlieb, Daniel - C.E.P.R. Discussion Papers - 2014
The informativeness principle demonstrates qualitative benefits to increasing signal precision. However, it is difficult to quantify these benefits -- and compare them against the costs of precision -- since we typically cannot solve for the optimal contract and analyze how it changes with...
Persistent link: https://www.econbiz.de/10011083624