Similar Search Results

Do managers with limited liability take more risky decisions? An information acquisition model

Malcomson, James M. - 2010

Risk-neutral individuals take more risky decisions when they have limited liability. Risk-neutral managers may not when acting as agents under contract and taking costly actions to acquire information before taking decisions. Limited liability makes it optimal to increase the reward for outcomes...

Persistent link: https://www.econbiz.de/10010275809

Do Zombies Rise When Interest Rates Fall? A Relationship Banking Model

Herweg, Fabian; Kähny, Maximilian - 2022

An entrepreneur chooses a relationship bank or market finance. The advantage of bank finance is that the quality of the … that the bank continues inefficient projects, i.e., zombie lending occurs. In the short run - for a given contract - a drop … in the market interest rate increases zombification. The bank adapts the contract to this drop in the long run, and …

Persistent link: https://www.econbiz.de/10013296271

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

Flexible contracts

Gottardi, Piero; Tallon, Jean Marc; Ghirardato, Paolo - 2010

This paper studies the costs and benefits of delegating decisions to superiorly informed agents relative to the use of rigid, non discretionary contracts. Delegation grants some flexibility in the choice of the action by the agent, but also requires the use of an appropriate incentive contract...

Persistent link: https://www.econbiz.de/10010266080

On the optimality of optimal income taxation

Bierbrauer, Felix J. - 2010

The Mirrleesian model of income taxation restricts attention to simple allocation mechanism with no strategic interdependence, i.e., the optimal labor supply of any one individual does not depend on the labor supply of others. It has been argued by Piketty (1993) that this restriction is...

Persistent link: https://www.econbiz.de/10010274943

Optimal use of labor market policies: the role of job search assistance

Wunsch, Conny - 2009

This paper studies the role of job search assistance programs in optimal welfare-to-work programs. The analysis is based on a framework, that allows for endogenous choice of benefit types and levels, wage taxes or subsidies, and activation measures such as monitoring and job search assistance...

Persistent link: https://www.econbiz.de/10010277193

Delegation and Interim Performance Evaluation

Schütte, Miriam; Wichardt, Philipp Christoph - 2013

This paper considers the effects of an interim performance evaluation on the decision of a principal to delegate authority to a potentially biased but better informed agent. Assuming the agents’ outside option to be determined by market beliefs about their type, interim evaluations (a) provide...

Persistent link: https://www.econbiz.de/10010293918

Private Monitoring, Collusion and the Timing of Information

Khalil, Fahad; Lawarrée, Jacques; Scott, Troy J. - 2013

When the information used by a principal to monitor an agent is private, and thus non-verifiable by a third party, the principal has a credibility issue with the agent. The agent should be concerned that the principal could misrepresent the information in order to collect a monetary penalty from...

Persistent link: https://www.econbiz.de/10010328839

Delegation and Dynamic Incentives

Shin, Dongsoo; Strausz, Roland - 2014

Using an agency model, we show how delegation, by generating additional private information, improves dynamic incentives under limited commitment. It circumvents ratchet effects and facilitates the revelation of persistent private information through two effects: a play-hardball effect, which...

Persistent link: https://www.econbiz.de/10010352361