The literature on incentive contracting suggests that the optimal performance pay contract depends on a tradeoff between productivity and agency costs. The effect of employee ability on this tradeoff is theoretically ambiguous, as the employee’s private gains (through more sophisticated gaming...

We identify and test a specific psychological mechanism underlying cross-national differences in preferences for performance-based versus redistributive compensation systems. We posit that individuals’ beliefs in the inherent justness and deservedness of individual outcomes (i.e., just world...

We analyze the determinants of value creation and capture in a buyer-supplier relationship. In particular, we study how key contracting parameters, such as production efficiency, transactional integrity, incentive gaming and alignment affect outcomes when buyer faces competing suppliers....