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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/10012697032

Public policy for venture capital

Keuschnigg, Christian; Nielsen, Søren Bo - 2001

This paper proposes a simple partial equilibrium model to investigate the effects of government policy on venture capital backed investments. Giving up an alternative career, entrepreneurs focus their effort on a single, high risk venture each. Venture capitalists acquire an equity stake and...

Persistent link: https://www.econbiz.de/10011398877

Disentangling managerial incentives from a dynamic perspective : the role of stock grants

Hili, Amal; Laussel, Didier; Long, Ngo Van - 2016

We analyze the optimal contract between a risk-averse manager and the initial shareholders in a two-period model where … second-period profit, so that it may be difficult to disentangle the incentives for these two types of effort. The contract … dividend risks. In the latter case, the efficient contract does not allow the manager to sell her granted stock, and both …

Persistent link: https://www.econbiz.de/10011538964

How to share it out : the value of information in teams

Gershkov, Alex; Li, Jianpei; Schweinzer, Paul - 2014

communication. Our main result shows that there exists a simple ranking-based contract which implements both desiderata in a wide …

Persistent link: https://www.econbiz.de/10010405163

Overwhelmed by routine tasks : a multi-tasking principal 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/10013201713

Performance in pass-fail assessments

Bertola, Giuseppe - 2024

Trading the cost of better performance off the probability that an imprecise test’s performance estimate falls short of the pass threshold, an assessee may perform above the threshold (and fear failure because of negative errors) or below it (and hope to pass because of positive errors). This...

Persistent link: https://www.econbiz.de/10014514952

Business groups in emerging markets : financial control and sequential investment

Hainz, Christa (contributor) - 2006

Persistent link: https://www.econbiz.de/10003364605

Delegating recruitment under asymmetric information

Sengupta, Sarbajit - 2002

Recruitment is often delegated to senior employees. Delegated recruitment, however, is vulnerable to moral hazard because senior employees may avoid recruiting the best candidates who could threaten their future seniority. We find that seniors will not deliberately choose bad candidates if the...

Persistent link: https://www.econbiz.de/10011514022

The Pygmalion effect : an agency model with reference dependent preferences

Daido, Kohei (contributor); Itō, Hideshi (contributor) - 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/10002756345

The incentive compatibility condition, firm culture, and social norms under moral hazard : theory and evidence

Dhami, Sanjit S.; Wei, Mengxing - 2024

In a principal-agent model under moral hazard we examine the psychological and social motivations of the agent that influence the incentive compatibility condition (ICC) of the agent. Under “firm culture” firms emphasize that high effort is consistent with its culture. Under “industry-wide...

Persistent link: https://www.econbiz.de/10015071165

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