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Misperceptions, Moral Hazard, and Incentives in Groups

Gaynor, Martin - 1987

Recent work has shown that, in the presence of moral hazard, balanced budget Nash equilibria in groups are not pareto-optimal. This work shows that when agents misperceive the effects of their actions on the joint outcome, there exist a set of sharing rules which balance the budget and lead to a...

Persistent link: https://www.econbiz.de/10012476839

Image Versus Information : Changing Societal Norms and Optimal Privacy

Ali, S. Nageeb - 2016

We analyze the costs and benefits of using social image to foster virtuous behavior. A Principal seeks to motivate reputation-conscious agents to supply a public good. Each agent chooses how much to contribute based on his own mix of public-spiritedness, private signal about the value of the...

Persistent link: https://www.econbiz.de/10012456472

Opportunity Counts : Teams and the Effectiveness of Production Incentives

Boning, Brent - 2001

This paper investigates the individual and joint effects of group incentive pay and problem-solving teams on productivity. To estimate models of adoption of these work practices and models of the effects of the work practices on productivity, we constructed a data set on the operations of 34...

Persistent link: https://www.econbiz.de/10012470418

The Tenuous Tradeoff Between Risk and Incentives

Prendergast, Canice - 2000

Empirical work testing for a negative tradeoff between risk and incentives, a cornerstone of agency theory, has not had …

Persistent link: https://www.econbiz.de/10012470935

Managerial Value Diversion and Shareholder Wealth

Bebchuk, Lucian Arye - 2000

The agents to whom shareholders delegate the management of corporate affairs may transfer value from shareholders to themselves through a variety of mechanisms, such as self-dealing, insider trading, and taking of corporate opportunities. A common view in the law and economics literature is that...

Persistent link: https://www.econbiz.de/10012471137

Performance Incentives Within Firms : The Effect of Managerial Responsibility

Aggarwal, Rajesh K. - 1999

executive officers. However, firms are run by teams of managers, and a theory of the firm should also explain the distribution … of incentives and responsibilities for other members of the top management team. An extension of the standard principal … responsibility. The aggregate pay-performance sensitivity of the top management team is quite substantial, at $30.24 per thousand …

Persistent link: https://www.econbiz.de/10012471450

Stock-Based Compensation and CEO (Dis)Incentives

Benmelech, Efraim - 2008

Stock-based compensation is the standard solution to agency problems between shareholders and managers. In a dynamic rational expectations equilibrium model with asymmetric information we show that although stock-based compensation causes managers to work harder, it also induces them to hide any...

Persistent link: https://www.econbiz.de/10012464915

The Role of Residual Claims and Self-Enforcement in Franchise Contracting

Lafontaine, Francine - 2002

Much of the economic literature on franchising has been concerned with incentive issues and how these are managed in franchised contracts. Two main types of incentive mechanisms have been identified: residual claims and self enforcement. In this paper we describe these incentive mechanisms, and...

Persistent link: https://www.econbiz.de/10012469847

Instrument-Based vs. Target-Based Rules

Halac, Marina - 2018

We develop a simple delegation model to study rules based on instruments vs. targets. A principal faces a better informed but biased agent and relies on joint punishments as incentives. Instrument-based rules condition incentives on the agent's observable action; target-based rules condition...

Persistent link: https://www.econbiz.de/10012244025

Incentive Contracting and the Franchise Decision

Lafontaine, Francine - 1998

We examine theoretical predictions and econometric evidence concerning franchise contracting and sales-force compensation and suggest a number of factors that ought to influence the contracts that are written between principles and agents. For each factor, we construct the simplest theoretical...

Persistent link: https://www.econbiz.de/10012472263

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