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Optimal Incentive Contracts For a Worker Who Envies His Boss

Dur, Robert; Glazer, Amihai - CESifo - 2004

A worker’s utility may increase in his own income, but envy can make his utility decline with his employer’s income … various assumptions about the object and generality of envy. Envy amplifies the effect of incentives on effort and, therefore …, increases optimal incentive pay. Moreover, envy can make profitsharing optimal, even when the worker’s effort is fully …

Persistent link: https://www.econbiz.de/10005765867

American Idol: Should it be a Singing Contest or a Popularity Contest?

Amegashie, J. Atsu - CESifo - 2007

In the very popular FOX TV reality show, American Idol, the judges, who are presumably experts in evaluating singing effort, have no voting power when the field is narrowed to the top twenty-four contestants. It is only the votes of viewers that count. In the 2007 season of the show, one of the...

Persistent link: https://www.econbiz.de/10005406199

Altruism and Envy in Contests: An Evolutionarily Stable Symbiosis

Konrad, Kai A. - CESifo - 2002

Altruists and envious people who meet in contests are symbionts. They do better than a population of narrowly rational individuals. If there are only altruists and envious individuals, a particular mixture of altruists and envious individuals is evolutionarily stable.

Persistent link: https://www.econbiz.de/10005766134

The European Central Bank: Lender of Last Resort in the Government Bond Markets?

Grauwe, Paul De - CESifo - 2011

The sovereign debt crisis has made it clear that central banking is more than keeping inflation low. Central banks are also responsible for financial stability. An essential tool in maintaining financial stability is provided by the capacity of the central bank to be the lender of last resort in...

Persistent link: https://www.econbiz.de/10009294102

Firms' Moral Hazard in Sickness Absences

Böheim, René; Leoni, Thomas - CESifo - 2011

Sick workers in many countries receive sick pay during their illness-related absences from the workplace. In several countries, the social security system insures firms against their workers’ sickness absences. However, this insurance may create moral hazard problems for firms, leading to the...

Persistent link: https://www.econbiz.de/10009320787

Subordinated debt, market discipline, and bank risk

Chen, Yehning; Hasan, Iftekhar - Suomen Pankki - 2011

This paper demonstrates that subordinated debt (‘subdebt’ thereafter) regulation can be an effective mechanism for disciplining banks. Under our proposal, investors buy the subdebt of a bank only if they receive favourable information about the bank, and the bank is subject to a regulatory...

Persistent link: https://www.econbiz.de/10009358951

How to Deal with Covert Child Labour, and Give Children an Effective Education, in a Poor Developing Country: An Optimal Taxation Problem with Moral Hazard

Cigno, Alessandro - CESifo - 2010

Given that credit and insurance markets are imperfect, and given also that intra-household transfers, and much of the work a child does, are private information, the second-best policy uses a combination of need and merit based education awards, together with a mix of taxes on parental income,...

Persistent link: https://www.econbiz.de/10008596586

Sticks and Carrots for the Alleviation of Long Term Poverty

Schroyen, Fred; Torsvik, Gaute - CESifo - 2002

Work requirements can make it easier to screen the poor from the non-poor.They can also affect future poverty by changing the poors' incentive to invest in their income capacity. The novelty of our study is the focus on long term poverty. We find that the argument for using work requirements as...

Persistent link: https://www.econbiz.de/10005765706

Moral Hazard and the Composition of Transfers: Theory with an Application to Foreign Aid

Amegashie, J. Atsu; Ouattara, Bazoumana; Strobl, Eric - CESifo - 2007

The paper presents a theoretical and empirical analysis of a donor’s choice of the composition of unrestricted and in-kind/restricted transfers to a recipient and how this composition is adjusted in response to changes in the moral hazard behavior of the recipient. In-kind or restricted...

Persistent link: https://www.econbiz.de/10005765770

Public Policy for Venture Capital

Keuschnigg, Christian; Nielsen, Søren Bo - CESifo - 2001

This paper proposes a simple partial equilibrium model to investigate the effects of government policy on venture capital backed investments. Giving up an alternative career, entrepreneurs focus their effort on a single, high risk venture each. Venture capitalists acquire an equity stake and...

Persistent link: https://www.econbiz.de/10005765815