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Money managers behave strategically when competing for fund flows within relatively small groups. We study strategic interaction between two risk-averse managers in continuous time, characterizing analytically their unique equilibrium dynamic investments. Driven by chasing and contrarian...
Persistent link: https://www.econbiz.de/10009144728
), material or other explicit incentives (laws) and social sanctions or rewards (norms). It first examines how honor, stigma and … social norms arise from individuals’ behaviors and inferences, and how they interact with material incentives. It then … also what shapes social judgements and moral sentiments. Setting law thus means both imposing material incentives and …
Persistent link: https://www.econbiz.de/10009371470
The potential distortions of job-search incentives caused by unemployment benefits and their financing are well known … (incentives) and equity (insurance). This implies that an increase in both benefits and the tax rate up to some point may increase …
Persistent link: https://www.econbiz.de/10008677233
We consider a framework of contractual interactions between public transport authorities and transport operators. We estimate simultaneously the contract choice by the authorities and the effect of regulation on the cost-reducing activity of the operators. We test whether the current regulatory...
Persistent link: https://www.econbiz.de/10008684677
We explore the consequence for taxation and regulation of bonus pay when investors are protected by taxpayers from downside risk. The paper develops a model where workers in financial sector firms make decisions about effort and risk-taking which are influenced by the structure of bonus pay....
Persistent link: https://www.econbiz.de/10009246598
It is often suggested that incentive schemes under moral hazard can be gamed by an agent with superior knowledge of the environment, and that deliberate lack of transparency about the incentive scheme can reduce gaming. We formally investigate these arguments. Ambiguous incentive schemes induce...
Persistent link: https://www.econbiz.de/10011083611
talented workers leads to an escalating reliance on performance pay and other high-powered incentives, thereby shifting effort … incentives downward in order to extract rents. More generally, as declining market frictions lead employers to compete more …, while inequality tends to rise monotonically. Bonus caps and income taxes can help restore balance in agents' incentives and …
Persistent link: https://www.econbiz.de/10011083769
We suggest a parsimonious dynamic agency model in which workers have status concerns. A firm is a promotion hierarchy in which a worker’s status depends on past performance. We investigate the optimality of two types of promotion hierarchies: (i) internal labor markets, in which agents have a...
Persistent link: https://www.econbiz.de/10011083868
tasks. We analyze the effects of the salience of incentives in a team production setting where the principal has an interest … incentive system without changing the incentive system. The results indicate that salience of incentives itself is statistically … and economically important for performance. We find that higher salience of incentives for quantity increases quantity …
Persistent link: https://www.econbiz.de/10011084038
experiment are facing high-powered incentives to increase the risk on behalf of others through hedged compensation contracts or … with tournament incentives. Compared to a baseline condition without such incentives, we find that the decision makers … respond strongly to these incentives that result in an increased risk exposure of others. However, we find that the increase …
Persistent link: https://www.econbiz.de/10011084365