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Dur, Robert A. J.; Schmittdiel, Heiner - 2013

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

The degradation of distorted performance measures

Sloof, Randolph; Praag, Mirjam van - 2008

Baker (2002) has demonstrated theoretically that the quality of performance measures used in compensation contracts …

Persistent link: https://www.econbiz.de/10011376645

Optimal incentive contracts when workers envy their boss

Dur, Robert A. J.; Glazer, Amihai - 2006

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

How important are risk-taking incentives in executive compensation?

Dittmann, Ingolf; Yu, Ko-Chia - 2009

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

The flipside of comparative payment schemes

Buser, Thomas; Dreber, Anna - 2013

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

Are CEOs incentivized to avoid corporate taxes? : empirical evidence on managerial bonus contracts

Schmittdiel, Heiner - 2014

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

Positional wages, market wages and firm size

Brink, René van den; Ruys, Pieter H. M. - 2005

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

The effects of performance measurement and compensation on motivation

Herpen, Marco van; Praag, Mirjam van; Cools, Cornelis - 2003

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

Leniency bias in long-term workplace relationships

Tichem, Jan - 2013

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

Social relations and relational incentives

Dur, Robert A. J.; Tichem, Jan - 2012

Persistent link: https://www.econbiz.de/10009722629