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Yes, Managers Should be Paid Like Bureaucrats

Frey, Bruno S.; Osterloh, Margit - Institut für Volkswirtschaftslehre, …

Corporate scandals, reflected in excessive management compensation and fraudulent accounts, cause great damage. Agency theory’s insistence to link the compensation of mangers and directors as closely as possible to firm performance is a major reason for these scandals. They cannot be overcome...

Persistent link: https://www.econbiz.de/10005627845

Are Stock Options the Managers' Blessing? Stock Option Compensation and Institutional Controls.

Benz, Matthias; Kucher, Marcel; Stutzer, Alois - Institut für Volkswirtschaftslehre, …

Stock option grants to top managers have largely contributed to the dramatic increase in US executive pay in recent years. In this paper it is argued that stock options, compared to other forms of compensation, have created strong incentives for managers to engage in lobbying activities for...

Persistent link: https://www.econbiz.de/10005627770

Corporate Governance for Crooks? The Case for Corporate Virtue

Osterloh, Margit; Frey, Bruno S. - Institut für Volkswirtschaftslehre, …

Corporate scandals are reflected in excessive top management compensation and fraudulent accounts. These scandals cause an enormous amount of damage, not only to the companies affected, but also to the market economy as a whole. As a solution, conventional wisdom suggests more monitoring and...

Persistent link: https://www.econbiz.de/10005760916

Corporate Governance: What can we Learn from Public Governance?

Benz, Matthias; Frey, Bruno S. - Institut für Volkswirtschaftslehre, …

In view of recent corporate scandals, it is argued that corporate governance can learn from public governance. Institutions devised to control and discipline the behavior of executives in the political sphere can give new insights into how to improve the governance of firms. Proposals in four...

Persistent link: https://www.econbiz.de/10005627873

Contractual Incompleteness and the Nature of Market Interactions

Brown, Martin; Falk, Armin; Fehr, Ernst - Institut für Volkswirtschaftslehre, …

We provide experimental evidence that contractual incompleteness, i.e., the absence of third party enforcement of workers’ effort or the quality of the good traded, causes a fundamental change in the nature of market interactions. If contracts are complete the vast majority of trades are...

Persistent link: https://www.econbiz.de/10005463525

On the economics and biology of trust

Fehr, Ernst - Institut für Volkswirtschaftslehre, … - 2009

In recent years, many social scientists have claimed that trust plays an important role in economic and social transactions. Despite its proposed importance, the measurement and the definition of trust seem to be not fully settled, and the identification of the exact role of trust in economic...

Persistent link: https://www.econbiz.de/10005463530

Clean Evidence on Peer Pressure

Falk, Armin; Ichino, Andrea - Institut für Volkswirtschaftslehre, …

While confounding factors typically jeopardize the possibility to use observational data to measure peer effects, field experiments offer the possibility to obtain clean evidence. In this paper we measure the output of four randomly selected groups of individuals who were asked to fill letters...

Persistent link: https://www.econbiz.de/10005627843

Was erklärt die steigenden Managerlöhne? Ein Diskussionsbeitrag

Benz, Matthias; Stutzer, Alois - Institut für Volkswirtschaftslehre, …

Die Entlohnung von Topmanagern ist in den westlichen Industrieländern über die letzten Jahre markant angestiegen. Wir stellen verschiedene Ansätze dar, welche diese Entwicklung zu erklären versuchen, und prüfen sie auf ihren Erklärungsgehalt: (1) Die Entwicklung ist das Ergebnis eines gut...

Persistent link: https://www.econbiz.de/10005627949

Pre-Play communication with forgone costly messages: experimental evidence on forward induction

Blume, Andreas; Weber, Roberto A.; Kriss, Peter H. - Institut für Volkswirtschaftslehre, … - 2011

costs dramatically reduce message use, but efficient coordination of actions occurs with similar frequency to that observed …We study communication in a two-player coordination game with Pareto-ranked equilibria. Prior research demonstrates … that efficient coordination is difficult without communication but obtains regularly with (mandatory) costless pre …

Persistent link: https://www.econbiz.de/10009358877

Maintaining efficiency while integrating entrants from lower-performing groups: an experimental study

Weber, Roberto A.; Salmon, Timothy C. - Institut für Volkswirtschaftslehre, … - 2011

production as a coordination game with Pareto-ranked equilibria. We initially create an efficient group and an inefficient one … restrictions in different ways to help understand why the institutions are effective in maintaining coordination. We find that both … restrictions work to maintain efficient coordination but they are effective for different reasons. …

Persistent link: https://www.econbiz.de/10009358878