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Relative performance pay, bonuses, and job-promotion tournaments

Kräkel, Matthias; Schöttner, Anja - 2008

Several empirical studies have challenged tournament theory by pointing out that (1) there is considerable pay variation within hierarchy levels, (2) promotion premiums only in part explain hierarchical wage differences and (3) external recruitment is observable on nearly any hierarchy level. We...

Persistent link: https://www.econbiz.de/10010343925

Implicit contracts : two different approaches

Gürtler, Oliver - 2006

In this paper, I compare two different approaches to model implicit contracting, the infinite-horizon approach typically used in the literature and afinite-horizon approach building on an adverse-selection model. I demonstrate that even the most convincing result of the infinite-horizon...

Persistent link: https://www.econbiz.de/10010343951

Equal sharing rules in partnerships

Bartling, Björn; Siemens, Ferdinand von - 2007

Partnerships are the prevalent organizational form in many industries. Most partnerships share profits equally among the partners. Following Kandel and Lazear (1992) it is often argued that peer pressure mitigates the arising free-rider problem. This line of reasoning takes the equal sharing...

Persistent link: https://www.econbiz.de/10010365862

On the explanatory value of inequity aversion theory

Shaked, Avner - 2006

In a number of papers on their theory of Inequity Aversion, E. Fehr and K. Schmidt have claimed that the theory explains the behavior in many experiments. By virtue of having an infinite number of parameters the theory can predict a wide range of outcomes, from the competitive to the...

Persistent link: https://www.econbiz.de/10010365893

Fairness and contract design

Fehr, Ernst; Klein, Alexander; Schmidt, Klaus M. - 2005 - This version: November 5, 2005

We show experimentally that fairness concerns may have a decisive impact on the actual and optimal choice of contracts … and predominantly choose the bonus contracts. Our results are consistent with recently developed theories of fairness …, which offer important new insights into the interaction of contract choices, fairness and incentives. …

Persistent link: https://www.econbiz.de/10010371080

The economics of fairness, reciprocity and altruism : experimental evidence and new theories ; chapter written for the Handbook of reciprocity, gift-giving and altruism

Fehr, Ernst; Schmidt, Klaus M. - 2005 - This version: June 6, 2005

Persistent link: https://www.econbiz.de/10010371081

On inequity aversion : a reply to Binmore and Shaked

Fehr, Ernst; Schmidt, Klaus M. - 2009

Persistent link: https://www.econbiz.de/10003909255

On inequity aversion : a reply to Binmore and Shaked

Fehr, Ernst; Schmidt, Klaus M. - 2009

In this paper we reply to Binmore and Shaked's criticism of the Fehr-Schmidt model of inequity aversion. We put the theory and their arguments into perspective and show that their criticism is not substantiated. Finally, we briefly comment on the main challenges for future research on social...

Persistent link: https://www.econbiz.de/10003848846

Subjective evaluation versus public information

Bester, Helmut; Münster, Johannes - 2013

This paper studies a principal-agent relation in which the principal's private information about the agent's effort choice is more accurate than a noisy public performance measure. For some contingencies the optimal contract has to specify ex post inefficiencies in the form of inefficient...

Persistent link: https://www.econbiz.de/10009781395

Buried in paperwork : excessive reporting in organizations

Strausz, Roland - 2004

This paper offers an explanation why a principal may demand too much paperwork from a subordinate: Due to limited liability and moral hazard a principal is unable to appropriate all rents. Internal paperwork allows a more accurate monitoring of the agent and enables the principal to appropriate...

Persistent link: https://www.econbiz.de/10010370531