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Bonus Culture: Competitive Pay, Screening, and Multitasking

Benabou, Roland; Tirole, Jean - Institute for the Study of Labor (IZA) - 2013

compensation. The model combines multitasking and screening, embedded into a Hotelling-like framework. Competition for the most …

Persistent link: https://www.econbiz.de/10010635587

Worker Self-Selection and the Profits from Cooperation

Kosfeld, Michael; von Siemens, Ferdinand - Institute for the Study of Labor (IZA) - 2008

We investigate a competitive labor market with team production. Workers differ in their motivation to exert team effort and types are private information. We show that there can exist a separating equilibrium in which workers self-select into different firms and firms employing cooperative...

Persistent link: https://www.econbiz.de/10005822981

Optimal Incentive Contracts under Moral Hazard When the Agent Is Free to Leave

Englmaier, Florian; Muehlheusser, Gerd; Roider, Andreas - Institute for the Study of Labor (IZA) - 2010

We characterize optimal incentive contracts in a moral hazard framework extended in two directions. First, after effort provision, the agent is free to leave and pursue some ex-post outside option. Second, the value of this outside option is increasing in effort, and hence endogenous. Optimal...

Persistent link: https://www.econbiz.de/10008557227

Negative Externalities and Equilibrium Existence in Competitive Markets with Adverse Selection

von Siemens, Ferdinand; Kosfeld, Michael - Institute for the Study of Labor (IZA) - 2009

Rothschild and Stiglitz (1976) show that there need not exist a competitive equilibrium in markets with adverse selection. Building on their framework we demonstrate that externalities between agents − an agent's utility upon accepting a contract depends on the average type attracted by the...

Persistent link: https://www.econbiz.de/10004976877

Producer Protection Legislation and Termination Damages in the Presence of Contracting Frictions

Wu, Steven Y. - Institute for the Study of Labor (IZA) - 2009

This study models producer protection legislation that would grant growers the right to claim damages (PPLD) if their contracts are prematurely terminated. In the absence of contracting frictions that prevent contractors from redesigning contracts to accommodate exogenous policy changes, PPLD...

Persistent link: https://www.econbiz.de/10005103260

Hidden Action, Identification, and Organization Design

Schnedler, Wendelin - Institute for the Study of Labor (IZA) - 2010

Incentives often fail in inducing economic agents to engage in a desirable activity; implementability is restricted. What restricts implementability? When does re-organization help to overcome this restriction? This paper shows that any restriction of implementability is caused by an...

Persistent link: https://www.econbiz.de/10008727777

Testing Canonical Tournament Theory: On the Impact of Risk, Social Preferences and Utility Structure

Sheremeta, Roman M.; Wu, Steven Y. - Institute for the Study of Labor (IZA) - 2012

We use experiments to test comparative statics predictions of canonical tournament theory. Both the roles of principal … tournament design. Consistent with theory, we observed an incentive effect from raising the winner's prize. However, we also … observed several empirical puzzles that appeared to contradict theory. Controlling for social preferences did not resolve the …

Persistent link: https://www.econbiz.de/10009646321

Search and Retirement under Asymmetric Information

Bi, Sheng; Langot, François - Institute for the Study of Labor (IZA) - 2014

implement a screening process when the information is asymmetric. We show that the optimal separating contract (an ascending …

Persistent link: https://www.econbiz.de/10010790513

Relative Performance Pay, Bonuses, and Job-Promotion Tournaments

Kräkel, Matthias; Schöttner, Anja - Institute for the Study of Labor (IZA) - 2008

Several empirical studies have challenged tournament theory by pointing out that (1) there is considerable pay …

Persistent link: https://www.econbiz.de/10005822027

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