This paper analyzes executive compensation in German and U.S. corporations for the period 2005-2009 including the financial crisis. We analyze the impact of stock market performance and accounting-based measures of firm performance on different compensation components. We find that only firm...

As the positive impact of trust on business success is widely undisputed, the question of how to measure trust naturally arises. Both expectations of trustworthy behavior and possible gains and losses from a trusting relationship influence the level of trust between two parties or individuals....

This paper incorporates a classical moral hazard problem with unobserved worker effort and bonus payments into a competitive search equilibrium environment with risk averse workers. The resulting framework permits an analysis of the effects of labour market competition and search frictions on...

Many scholars argue that the delegation of decision rights to independent institutions promotes trust and specific investments. We test this conjecture with variations of the trust game in which the back transfer decision is delegated to a third party. A randomly chosen third party with a fixed...

In intergroup contests a manager advises and motivates her group’s members. Her rewards often depend on the subsequent contest expenditure of the members. I test whether such incentives undermine the credibility and effectiveness of a manager’s efforts. In the different experimental...

The optimal reporting frequency is an important issue in accounting. In many production settings, substitution effects across periods occur. This paper shows that the optimal reporting frequency depends on the strength of the substitution effect and on the information content of performance...

The presented model demonstrates how the coexistence of reciprocal and selfish types influences the formation of employment relationships, their profitability, wage differentials, wage competition, and unemployment in the presence of moral hazard. Wage and profitability differentials result from...