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Fairness, adverse selection, and employment contracts

Siemens, Ferdinand von - 2005

extent of their fairness concerns. Fairness is modelled as inequity aversion, where fair-minded workers suffer if their … colleagues get more income net of production costs. Screening workers with equal productivity but different fairness concerns is … the fraction of fair-minded workers. As a result, fairness might influence the employment contracts of all workers …

Persistent link: https://www.econbiz.de/10010366541

Courtesy and idleness : gender differences in team work and team competition

Ivanova-Stenzel, Radosveta; Kübler, Dorothea - 2005

Does gender play a role in the context of team work? Our results based on a real-effort experiment suggest that performance depends on the composition of the team. We find that female and male performance differ most in mixed teams with revenue sharing between the team members, as men put in...

Persistent link: https://www.econbiz.de/10010365905

Adding a stick to the carrot? : the interaction of bonuses and fines

Fehr, Ernst; Schmidt, Klaus M. - 2007

In this paper we report on a principal-agent experiment where the principal can choose whether to rely on an unenforcable bonus contract or to combine the bonus contract with a fine if the agent's effort falls below a minimum standard. We show that most principals do not use the fine and that...

Persistent link: https://www.econbiz.de/10010365854

Security bid auctions for agency contracts

Chŏn, Pyŏng-hŏn; Wolfstetter, Elmar - 2012

A principal uses security bid auctions to award an incentive contract to one among several agents, in the presence of hidden action and hidden information. Securities range from cash to equity and call options. 'Steeper' securities are better surplus extractors that narrow the gap between the...

Persistent link: https://www.econbiz.de/10009571056

Ambiguity and social interaction

Eichberger, Jürgen; Kelsey, David; Schipper, Burkhard - 2005

We present a non-technical account of ambiguity in strategic games and show how it may be applied to economics and social sciences. Optimistic and pessimistic responses to ambiguity are formally modelled. We show that pessimism has the effect of increasing (decreasing) equilibrium prices under...

Persistent link: https://www.econbiz.de/10010371082

Optimal delegated search with adverse selection and moral hazard

Ulbricht, Robert - 2014

The paper studies a model of delegated search. The distribution of search revenues is unknown to the principal and has to be elicited from the agent in order to design the optimal search policy. At the same time, the search process is unobservable, requiring search to be self-enforcing. The two...

Persistent link: https://www.econbiz.de/10010358239

Bonus pools and the informativeness principle

Imhof, Lorens; Kräkel, Matthias - 2013

Previous work on moral-hazard problems has shown that, under certain conditions, bonus contracts create optimal individual incentives for risk-neutral workers. In our paper we demonstrate that, if a firm employs at least two workers, it may further bene.t from combining worker compensation via a...

Persistent link: https://www.econbiz.de/10010198505

Tournaments with gaps

Imhof, Lorens; Kräkel, Matthias - 2013

A standard tournament contract specifies only tournament prizes. If agents' performance is measured on a cardinal scale, the principal can complement the tournament contract by a gap which defines the minimum distance by which the best performing agent must beat the second best to receive the...

Persistent link: https://www.econbiz.de/10010198511

Contracting with imperfect commitment and noisy communication

Bester, Helmut; Strausz, Roland - 2004 - Version 1.3, December 2004

This paper provides new analytical tools for studying principal-agent problems with adverse selection and limited commitment. By allowing the principal to use general communication devices we overcome the literature's common, but overly restrictive focus on one-shot, direct communication. In...

Persistent link: https://www.econbiz.de/10010361996

Tournaments versus piece rates under limited liability

Kräkel, Matthias - 2004

Lecture on the first SFB/TR 15 meeting, Gummersbach, July, 18 - 20, 2004: The existing literature on the comparison of tournaments and piece rates as alternative incentive schemes has focused on the case of unlimited liability. However, in practice real workers' wealth is typically restricted....

Persistent link: https://www.econbiz.de/10010343971

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