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Rank-Order Tournaments as Optimum Labor Contracts
Lazear, Edward P. - 1979
This paper analyzes compensation schemes which pay according to an individual's ordinal rank in an organization rather than his output level. When workers are risk neutral, it is shown that wages based upon rank induce the same efficient allocation of resources as an incentive reward scheme...
Persistent link: https://www.econbiz.de/10012478746
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Identification in Matching Games
Fox, Jeremy T. - 2009
I study a many-to-many, two-sided, transferable-utility matching game. Consider data on matches or relationships between agents but not on the choice set of each agent. I investigate what economic parameters can be learned from data on equilibrium matches and agent characteristics. Features of a...
Persistent link: https://www.econbiz.de/10012463558
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Moral Hazard in Partnerships
Gaynor, Martin - 1990
In this paper, we investigate incentive structures within partnerships. Partnerships provide a classic example of the tradeoff between risk spreading and moral hazard. The degree to which firms choose to spread risk and sacrifice efficiency incentives depends upon risk preferences, for which...
Persistent link: https://www.econbiz.de/10012475660
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Individual and Collective Information Acquisition : An Experimental Study
Reshidi, Pëllumb; Lizzeri, Alessandro; Yariv, Leeat; … - National Bureau of Economic Research - 2021
decision. We report results from lab experiments focused on such information-collection processes. We consider decisions … decision accuracies over time. Furthermore, groups using majority rule yield especially hasty and inaccurate decisions …
Persistent link: https://www.econbiz.de/10012794585
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Why Did Putin Invade Ukraine? A Theory of Degenerate Autocracy
Egorov, Georgij V.; Sonin, Konstantin - National Bureau of Economic Research - 2023
Many, if not most, personalistic dictatorships end up with a disastrous decision such as Hitler's attack on the Soviet …. Even if the decision is not ultimately fatal for the regime, such as Mao's Big Leap Forward or the Pol Pot …-informed subordinates have no chance to prevent the decision from being implemented. We offer a dynamic model of non-democratic politics, in …
Persistent link: https://www.econbiz.de/10014250204
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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 much success. Indeed, the data seem to suggest a positive relationship between measures of uncertainty and incentives, rather than the posited negative tradeoff. I argue that...
Persistent link: https://www.econbiz.de/10012470935
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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
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Do CEOs Set Their Own Pay? The Ones Without Principals Do
Bertrand, Marianne - 2000
We empirically examine two competing views of CEO pay. In the contracting view, pay is used to solve an agency problem: the compensation committee optimally chooses pay contracts which give the CEO incentives to maximize shareholder wealth. In the skimming view, pay is the result of an agency...
Persistent link: https://www.econbiz.de/10012471166
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The Visible Hand, the Invisible Hand and Efficiency
Goldman, Eitan - 2000
When a firm forms a market closes. Resources that were previously allocated via the price system are allocated by managerial authority within the firm. We explore this choice of organizational form using a model of price formation in which agents negotiate prices on behalf of their principals...
Persistent link: https://www.econbiz.de/10012471182
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Does Product Market Competition Reduce Agency Costs?
Jagannathan, Ravi - 2000
The folk wisdom is that competition reduces agency costs. We provide indirect empirical support for this view. We argue that the temptation to retain cash and engage in less productive activities is more severe for firms in less competitive industries. Hence an unanticipated increase in...
Persistent link: https://www.econbiz.de/10012471296