Showing 1 - 10 of 2,639
Inspired by a recent observation about an online retail company, this paper explains why a firm may find it optimal to offer an exit bonus to recent hires so as to induce self-selection. We study a double adverse selection problem, in which the principal can neither observe agents’ commitment...
Persistent link: https://www.econbiz.de/10010224783
Baker (2002) has demonstrated theoretically that the quality of performance measures used in compensation contracts …
Persistent link: https://www.econbiz.de/10011376645
A worker's utility may increase with his income, but envy can make his utility decline with his employer's income. This article uses a principal-agent model to study profit-maximizing contracts when a worker envies his employer. Envy tightens the worker's participation constraint and so calls...
Persistent link: https://www.econbiz.de/10011335185
This paper investigates whether observed executive compensation contracts are designed to provide risk … observed compensation practice surprisingly well. In particular, it justifies large option holdings and high base salaries. Our … major objective in executive compensation practice. …
Persistent link: https://www.econbiz.de/10011378949
Comparative payment schemes and tournament-style promotion mechanisms are ubiquitous in the work place. We test experimentally whether they have a negative impact on the willingness to cooperate. Participants first perform in a simple task and then participate in a public goods game. The payment...
Persistent link: https://www.econbiz.de/10010225779
explanation is that managers require to be compensated for the additional risk inherent in running an aggressive tax strategy. In … accordance with previous literature, we document a substantial heterogeneity in compensation practices across industries. It …
Persistent link: https://www.econbiz.de/10010346227
We model a firm in an institutional market setting, consisting of a production technology and its governance. The governance consists of a hierarchical firm structure, a cost efficiency parameter,and an internal pay system. The depth of the firm is determined by profit maximization under the...
Persistent link: https://www.econbiz.de/10011343293
predict that the design and implementation of a performance measurement and compensation system affect the motivation of … compensation system and extrinsic motivation. Intrinsic motivation is not affected by the design of monetary compensation, but by … promotion opportunities. The compensation system also significantly affects work satisfaction and turnover intent. Our results …
Persistent link: https://www.econbiz.de/10011333892
This paper studies how firms can efficiently incentivize supervisors to truthfully report employee performance. To this end, I develop a dynamic principal-supervisor-agent model. The supervisor is either selfish or altruistic towards the agent, which is observable to the agent but not to the...
Persistent link: https://www.econbiz.de/10010226565
Persistent link: https://www.econbiz.de/10009722629