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Subjective Evaluations: Discretionary Bonuses and Feedback Credibility

Fuchs, William - Institute for the Study of Labor (IZA) - 2013

We provide a new rationale for the use of discretionary bonuses. In a setting with unknown match qualities between a worker and a firm and subjective evaluations by the principal, bonuses are useful in order to make the feedback from the firm to the workers credible. This way workers in good...

Persistent link: https://www.econbiz.de/10010720080

The Good, the Bad and the Naive: Do Fair Prices Signal Good Types or Do They Induce Good Behaviour?

Dulleck, Uwe; Johnston, David W.; Kerschbamer, Rudolf; … - Institute for the Study of Labor (IZA) - 2012

Evidence on behavior of experts in credence goods markets raises an important causality issue: Do "fair prices" induce "good behavior", or do "good experts" post "fair prices"? To answer this question we propose and test a model with three seller types: "the good" choose fair prices and behave...

Persistent link: https://www.econbiz.de/10011279266

Labour Market Signalling and Unemployment Duration: An Empirical Analysis Using Employer-Employee Data

Frederiksen, Anders; Ibsen, Rikke; Rosholm, Michael; … - Institute for the Study of Labor (IZA) - 2006

This paper tests the signalling hypothesis using detailed flow-based employer-employee data from Denmark. The primary … plausible estimates of the signalling effect. It is established that the positive ability signal of being displaced due to a … previously been ignored in the empirical analysis of the signalling hypothesis such as local labour market conditions, the sector …

Persistent link: https://www.econbiz.de/10005761903

Horizontal Mismatch in the Labour Market of Graduates: The Role of Signalling

Domadenik, Polona; Farčnik, Daša; Pastore, Francesco - Institute for the Study of Labor (IZA) - 2013

We follow Brodaty et al. (2008) and develop a model within the signalling literature where an employer decides whether … signalling effect of individual and institutional quality of study on individual horizontal match quality. First, based on a …

Persistent link: https://www.econbiz.de/10010990942

Constrained Firms, Not Subsistence Activities: Evidence on Capital Returns and Accumulation in Peruvian Microenterprises

Göbel, Kristin; Grimm, Michael; Lay, Jann - Institute for the Study of Labor (IZA) - 2012

We investigate the returns to capital and capital accumulation using panel data of Peruvian micro enterprises (MEs). Marginal returns to capital are found to be very high at low levels of capital, but rapidly decreasing at higher levels. The dynamic analyses of capital accumulation in MEs...

Persistent link: https://www.econbiz.de/10010627842

Defending Gibrat’s Law as a Long-Run Regularity

Lotti, Francesca; Santarelli, Enrico; Vivarelli, Marco - Institute for the Study of Labor (IZA) - 2007

According to Gibrat’s Law of Proportionate Effect, the growth rate of a given firm is independent of its size at the beginning of the period examined. While earlier studies tended to confirm the Law, more recent research generally rejects it. This paper reconciles these two streams of...

Persistent link: https://www.econbiz.de/10005763509

Black Sheep and Walls of Silence

Muehlheusser, Gerd; Roider, Andreas - Institute for the Study of Labor (IZA) - 2004

In this paper we analyze the frequently observed phenomenon that (i) some members of a team ("black sheep") exhibit behavior disliked by other (honest) team members, who (ii) nevertheless refrain from reporting such misbehavior to the authorities (they set up a "wall of silence"). Much cited...

Persistent link: https://www.econbiz.de/10005822967

Second-Degree Moral Hazard in a Real-World Credence Goods Market

Balafoutas, Loukas; Kerschbamer, Rudolf; Sutter, Matthias - Institute for the Study of Labor (IZA) - 2013

Empirical literature on moral hazard focuses exclusively on the direct impact of asymmetric information on market outcomes, thus ignoring possible repercussions. We present a field experiment in which we consider a phenomenon that we call second-degree moral hazard – the tendency of the supply...

Persistent link: https://www.econbiz.de/10011156456

What Drives Taxi Drivers? A Field Experiment on Fraud in a Market for Credence Goods

Balafoutas, Loukas; Beck, Adrian; Kerschbamer, Rudolf; … - Institute for the Study of Labor (IZA) - 2011

Credence goods are characterized by informational asymmetries between sellers and consumers that invite fraudulent behavior by sellers. This paper presents the results of a natural field experiment on taxi rides in Athens, Greece, set up to measure different types of fraud and to examine the...

Persistent link: https://www.econbiz.de/10009021638

International Migration, Imperfect Information, and Brain Drain

Dequiedt, Vianney; Zenou, Yves - Institute for the Study of Labor (IZA) - 2011

We consider a model of international migration where skills of workers are imperfectly observed by firms in the host country and where information asymmetries are more severe for immigrants than for natives. There are two stages. In the first one, workers in the South decide whether to move and...

Persistent link: https://www.econbiz.de/10009147301