talented workers leads to an escalating reliance on performance pay and other high-powered incentives, thereby shifting effort … away from less easily contractible tasks such as long-term investments, risk management and within-firm cooperation. Under … distorts incentives downward in order to extract rents. More generally, as declining market frictions lead employers to compete …

leads to weaker incentives for effort, compared with nonintegration. Our theory makes minimal assumptions about the … division managers. The division managers' job is to create profitable investment projects. Giving the managers incentives to do …We develop a theory of firm scope in which integrating two firms into one facilitates the allocation of resources, but …

divisions to replace high incentive pay to the division heads by incentives based on private benefits of control. In that …

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 …

Incentives often fail in inducing economic agents to engage in a desirable activity; implementability is restricted …

Several empirical studies have challenged tournament theory by pointing out that (1) there is considerable pay …-tier rents for creating incentives on tier 1. If workers are heterogeneous, the firm strictly improves the selection quality of a …