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Incentives and information as driving forces of default effects

Altmann, Steffen; Falk, Armin; Grunewald, Andreas - 2015

The behavioral relevance of non-binding defaults is well established. While most research has focused on decision makers’ responses to a given default, we argue that this individual decision making perspective is incomplete. Instead, a comprehensive understanding of default effects requires to...

Persistent link: https://www.econbiz.de/10011345779

Overconfidence and managers' responsibility hoarding

Nieken, Petra; Sadrieh, Abdolkarim; Zhou, Nannan - 2011

Overconfidence is a well-established behavioral phenomenon that involves an overestimation of own capabilities. We introduce a model, in which managers and agents exert effort in a joint production, after the manager decides on the allocation of the tasks. A rational manager tends to delegate...

Persistent link: https://www.econbiz.de/10009571367

Good news and bad news in subjective performance evaluation

Budde, Jörg - 2013

Earlier studies show that contracts under subjective performance evaluation are dichotomous and punish only worst performance. I show that with limited liability payments need not be binary. More importantly, if the agent earns a rent from limited liability, the optimal contract distinguishes...

Persistent link: https://www.econbiz.de/10010200421

Veto-based delegation

Mylovanov, Tymofiy - 2005 - First version: October 2004, this version: January 2005

In a principal-agent model with hidden information and no monetary transfers, I establish the Veto-Power Principle: any incentive-compatible outcome can be implemented through veto-based delegation with an endogenously chosen default decision. This result demonstrates the exact nature of...

Persistent link: https://www.econbiz.de/10010373505

Incentives, reputation and the allocation of authority

Englmaier, Florian; Filipi, Ales; Singh, Ravi - 2010 - First Version: January 2002; Revised, February 2010

uncertain ability in a context in which the manager has both compensationbased and reputational incentives. The optimal level of … discretion productively. Reputational incentives reduce the necessary monetary incentives to discourage purely opportunistic … benefits of delegating control, leading to decreased managerial authority and stronger monetary incentives. When the principal …

Persistent link: https://www.econbiz.de/10008822070

Bonus pools, limited liability, and tournaments

Budde, Jörg - 2007

Tournaments have been objected as resulting from ad hoc restrictions to the contracting problem which are not easily justified. Taking into account that a performance measure might not be verifiable to a third party, however, a restriction to payments which sum up to a constant may be...

Persistent link: https://www.econbiz.de/10010343933

On delegation under relational contracts

Gürtler, Oliver - 2006

In this paper, a principal's decision between delegating two tasks or handling one of the two tasks herself is analyzed. We assume that the principal uses both, formal contracts and informal agreements sustained by the value of future relationships (relational contracts) as incentive device. It...

Persistent link: https://www.econbiz.de/10010365874

An experimental study on the information structure in teams

Ludwig, Sandra; Strassmair, Christina - 2009

Is free-riding in teams reduced when one member receives a signal on his colleagueís performance? And how does free-riding depend on the signal's type? We address these questions in experimental teams in which two agents sequentially exert effort to contribute to the team output. We vary the...

Persistent link: https://www.econbiz.de/10003909260

Budget processes : theory and experimental evidence

Ehrhart, Karl-Martin; Gardner, Roy J.; Hagen, Jürgen von; … - 2006

This paper studies budget processes, both theoretically and experimentally. We compare the outcomes of bottom-up and top-down budget processes. It is often presumed that a top-down budget process leads to a smaller overall budget than a bottom-up budget process. Ferejohn and Krehbiel (1987)...

Persistent link: https://www.econbiz.de/10010374866

In search of workers' real effort reciprocity : a field and a laboratory experiment

Hennig-Schmidt, Heike; Rockenbach, Bettina; Sadrieh, … - 2005

We present a field experiment to assess the effect of own and peer wage variations on actual work effort of employees with hourly wages. Work effort neither reacts to an increase of the own wage, nor to a positive or negative peer comparison. This result seems at odds with numerous laboratory...

Persistent link: https://www.econbiz.de/10010343961

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