Similar Search Results

Advantageous Selection Without Moral Hazard (with an Application to Life Care Annuities)

De Donder, Philippe; Leroux, M.‐L; Salanié, François - 2022

Advantageous (or propitious) selection occurs when an increase in the premium of an insurance contract induces high-cost agents to quit, thereby reducing the average cost among remaining buyers. Hemenway (1990) and many subsequent contributions motivate its advent by differences in risk-aversion...

Persistent link: https://www.econbiz.de/10014083046

The Pygmalion effect : an agency model with reference dependent preferences

Daido, Kohei; Itoh, Hideshi - 2005

We attempt to formulate and explain two types of self-fulfilling prophecy, called the Pygmalion effect (if a supervisor thinks her subordinates will succeed, they are more likely to succeed) and the Galatea effect (if a person thinks he will succeed, he is more likely to succeed). To this...

Persistent link: https://www.econbiz.de/10010261169

Stochastic Contracts and Subjective Evaluations

Lang, Matthias - 2021

Subjective evaluations are widely used, but call for different contracts from traditional moral-hazard settings. Previous literature shows that contracts require payments to third parties, which real-world contracts rarely use. I show that the implicit assumption of deterministic contracts makes...

Persistent link: https://www.econbiz.de/10013311715

Overwhelmed by Routine Tasks: A Multi-Tasking Principle Agent Perspective

Demougin, Dominique; Helm, Carsten - 2022

We analyze a multitasking model with a verifiable routine task and a skill-dependent activity characterized by moral hazard. Contracts negotiated by firm/employee pairs follow from Nash bargaining. High- and low-skilled employees specialize, intermediate productivity employees perform both...

Persistent link: https://www.econbiz.de/10013353365

Employee Referral, Social Proximity and Worker Discipline: Theory and Evidence from India

Dhillon, Amrita; Iversen, Vegard; Torsvik, Gaute - 2013

We study an important mechanism underlying employee referrals into informal low skilled jobs in developing countries. Employers can exploit social preferences between employee referees and potential workers to improve discipline. The profitability of using referrals increases with referee stakes...

Persistent link: https://www.econbiz.de/10010317024

Incentive contracts and efficient unemployment benefits

Demougin, Dominique M.; Helm, Carsten - 2009

Several European countries have reformed their labor market institutions. Incentive effects of unemployment benefits have been an important aspect of these reforms. We analyze this issue in a principal-agent model, focusing on unemployment levels and labor productivity. In our model, a higher...

Persistent link: https://www.econbiz.de/10010273802

Communicating Subjective Evaluations

Lang, Matthias - 2014

Should principals explain and justify their evaluations? Suppose the principal's evaluation is private information, but … space is restricted, but the message is costless. I show that the principal justifies her evaluation to the agent if the … evaluation indicates bad performance. The justification assures the agent that the principal has not distorted the evaluation …

Persistent link: https://www.econbiz.de/10010398669

Redistribution with Performance Pay

Doligalski, Pawel - 2020

Half of the jobs in the U.S. feature pay-for-performance. We study nonlinear income taxation in a model where such contracts arise in private labor markets that are constrained by moral hazard frictions. We derive novel formulas for the incidence of arbitrarily nonlinear reforms of a given tax...

Persistent link: https://www.econbiz.de/10012834365

Market competition and lower tier incentives

Theilen, Bernd - 2008

The relationship between competition and performance-related pay has been analyzed in single-principal-single-agent models. While this approach yields good predictions for managerial pay schemes, the predictions fail to apply for employees at lower tiers of a firm's hierarchy. In this paper, a...

Persistent link: https://www.econbiz.de/10010264481

How to deal with covert child labour, and give children an effective education, in a poor developing country: An optimal taxation problem with moral hazard

Cigno, Alessandro - 2010

Given that credit and insurance markets are imperfect, and given also that intra-household transfers, and much of the work a child does, are private information, the second-best policy uses a combination of need and merit based education awards, together with a mix of taxes on parental income,...

Persistent link: https://www.econbiz.de/10010270527

1
2
3
4
5
6
7
8
9
10
Next
Last