Showing 1 - 10 of 21
We study optimal incentive contracts for workers who are reciprocal to management attention. When neither worker's effort nor manager's attention can be contracted, a double moral-hazard problem arises, implying that reciprocal workers should be given weak financial incentives. In a...
Persistent link: https://www.econbiz.de/10011377049
This paper offers a new theory of discrimination in the workplace. We consider a manager who has to assign two tasks to two employees. The manager has superior information about the employees' abilities. We show that besides an equilibrium where the manager does not discriminate, equilibria...
Persistent link: https://www.econbiz.de/10010238944
Persistent link: https://www.econbiz.de/10010190655
A novel debate within competition policy and regulation circles is whether autonomous machine learning algorithms may learn to collude on prices. We show that when fims face short-run price commitments, independent Q-learning (a simple but well-established self-learning algorithm) learns to...
Persistent link: https://www.econbiz.de/10011869980
One acclaimed role of managers is to monitor workers in team production processes and discipline them through the threat of terminating them from the team (Alchian and Demsetz, 1972). We extend a standard weakest link experiment with a manager that can decide to replace some of her team members...
Persistent link: https://www.econbiz.de/10010532586
This paper studies wage structure characteristics and their incentive effects within one firm. Based on personnel records and an employee survey, we provide evidence that wages are attached to jobs and that promotions play a dominant role as a wage determinant. We furthermore show that a...
Persistent link: https://www.econbiz.de/10011337995
Persistent link: https://www.econbiz.de/10009720760
This paper studies how a three-layer hierarchical firm (principal-supervisor-agent) optimally creates effort norms for its employees. The key assumption is that effort norms are affected by the example of superiors. In equilibrium, norms are eroded as one moves down the hierarchy. The reason is...
Persistent link: https://www.econbiz.de/10010226550
On theoretical grounds, monitoring of top executives by the (supervisory) board is expected to be value relevant. The empirical evidence is ambiguous and we analyze three non-competing explanations for this ambiguity: (i) The positive effect on firm value of board monitoring is hidden in stock...
Persistent link: https://www.econbiz.de/10011453242
We study hiring in a labor market where worker ability can only be observed on-the-job, but quickly becomes public information after labor market entry. We show that firms in these markets have a socially inefficient incentive to hire low talented, experienced workers instead of more promising...
Persistent link: https://www.econbiz.de/10011772903