This paper proposes an alternative to standard cardinal tournaments. The analysis contrasts "hybrid" cardinal tournaments to standard cardinal tournaments and piece rates. It shows that providing for partial insurance against common uncertainty via a hybrid tournament (in which the weights on...

This paper compares relative performance evaluation via tournaments to absolute performance evaluation via piece rates when agents are heterogeneous ex post, to make the point that agent heterogeneity compromises the insurance function of tournaments. In particular, we show that the more...

This paper compares relative performance evaluation via tournaments to absolute performance evaluation via piece rates when agents are heterogeneous ex post, to make the point that agent heterogeneity compromises the insurance function of tournaments. In particular, we show that the more...

Firms can use repayment agreements in order to protect their training investments in case a worker leaves the firm after training took place. In this empirical research note, I use linked employer-employee data to estimate the impact of industrial relations and wage structures on the probability...

We conducted an experiment to compare how overconfidence is influenced by performance-based and fixed payment schemes. Participants in the experiment were students prior to taking a final exam in Introduction to Microeconomics. We find that most participants were overconfident regarding their...

We conducted an experiment to compare how overconfidence is influenced by performance-based and fixed payment schemes. Participants in the experiment were students prior to taking a final exam in Introduction to Microeconomics. We find that most participants were overconfident regarding their...

Theoretical and empirical evidence is presented to show that inefficient power firms in China are subsidised by the state through the ability to charge high electricity prices and the creation of a “soft price constraint†on costs. This cost inefficiency challenges the merits of...

We analyze the choice between a one-tier and a two-tier board structure in a firm with a large shareholder sitting on the board. The board has two tasks: project selection and monitoring the ability of the manager. In a one-tier structure, the sole board performs all tasks. In a two-tier...