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Baye, Michael R.; Kovenock, Dan; Vries, Casper G. de - Tinbergen Institute - 2009

, tournaments, R&D races, models of ligitation, and a host of other contests. …-order contests with complete information, in which each player's strategy generates direct or indirect affine "spillover" effects … important economic environments, as well as in classic contests adapted to recent experimental and behavioral models where …

Persistent link: https://www.econbiz.de/10004964456

How Important Are Risk-Taking Incentives in Executive Compensation?

Dittmann, Ingolf; Yu, Ko-Chia - Tinbergen Institute - 2009

This paper investigates whether observed executive compensation contracts are designed to provide risk-taking incentives in addition to effort incentives. We develop a stylized principal-agent model that captures the interdependence between firm risk and managerial incentives. We calibrate the...

Persistent link: https://www.econbiz.de/10004987438

Tournament Incentives in The Field: Gender Differences in The Workplace

Delfgaauw, Josse; Dur, Robert; Sol, Joeri; Verbeke, Willem - Tinbergen Institute - 2009

We ran a field experiment in a Dutch retail chain consisting of 128 stores. In a random sample of these stores, we introduced short-term sales competitions among subsets of stores. We find that sales competitions have a large effect on sales growth, but only in stores where the store's manager...

Persistent link: https://www.econbiz.de/10004987442

The Interaction between Explicit and Relational Incentives: An Experiment

Sloof, Randolph; Sonnemans, Joep - Tinbergen Institute - 2009

We consider repeated trust game experiments to study the interplay between explicit and relational incentives. After having gained experience with two payoff variations of the trust game, subjects in the final part explicitly choose which of these two variants to play. Theory predicts that...

Persistent link: https://www.econbiz.de/10005016258

Gift Exchange and the Separation of Ownership and Control

Maximiano, Sandra; Sloof, Randolph; Sonnemans, Joep - Tinbergen Institute - 2006

Numerous gift exchange experiments have found a positive relationship between employers' wage offers and workers' effort levels. In (almost) all these experiments the employer both owns and controls the firm. Yet in reality many firms are characterized by the separation of ownership and control....

Persistent link: https://www.econbiz.de/10005136878

Optimal Incentive Contracts when Workers envy their Boss

Dur, Robert; Glazer, Amihai - Tinbergen Institute - 2004

A worker's utility may increase with his income, but envy can make his utility decline with his employer's income. This article uses a principal-agent model to study profit-maximizing contracts when a worker envies his employer. Envy tightens the worker's participation constraint and so calls...

Persistent link: https://www.econbiz.de/10005136986

The Degradation of Distorted Performance Measures

Sloof, Randolph; Praag, Mirjam van - Tinbergen Institute - 2008

Baker (2002) has demonstrated theoretically that the quality of performance measures used in compensation contracts hinges on two characteristics: noise and distortion. These criteria, though, will only be useful in practice as long as the noise and distortion of a performance measure can be...

Persistent link: https://www.econbiz.de/10005137095

Rent-seeking versus Productive Activities in a Multi-task Experiment

Oosterbeek, Hessel; Sloof, Randolph; Sonnemans, Joep - Tinbergen Institute - 2006

Incentive instruments like asset ownership and performance pay often have to strike a balance between the productive incentives and the rent-seeking incentives they provide. Standard theory predicts that a given instrument becomes less attractive when the effectiveness of rent-seeking activities...

Persistent link: https://www.econbiz.de/10005137154

Reciprocity and Incentive Pay in the Workplace

Dur, Robert; Non, Arjan; Roelfsema, Hein - Tinbergen Institute - 2008

We study optimal incentive contracts for workers who are reciprocal to management attention. When neither worker's effort nor manager's attention can be contracted, a double moral-hazard problem arises, implying that reciprocal workers should be given weak financial incentives. In a...

Persistent link: https://www.econbiz.de/10005137227

Wage Structure and the Incentive Effect of Promotions

Herpen, Marco van; Cools, Kees; Praag, Mirjam van - Tinbergen Institute - 2004

This paper studies wage structure characteristics and their incentive effects within one firm. Based on personnel records and an employee survey, we provide evidence that wages are attached to jobs and that promotions play a dominant role as a wage determinant. We furthermore show that a...

Persistent link: https://www.econbiz.de/10005144477

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