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Optimal Incentive Contracts Under Moral Hazard When the Agent is Free to Leave

Englmaier, Florian - 2010

We characterize optimal incentive contracts in a moral hazard framework extended in two directions. First, after effort provision, the agent is free to leave and pursue some ex-post outside option. Second, the value of this outside option is increasing in effort, and hence endogenous. Optimal...

Persistent link: https://www.econbiz.de/10013141421

You Don't Always Get What You Pay For

Schnedler, Wendelin - 2007

Consider a principal-agent relationship in which more effort by the agent raises the likelihood of success. Does rewarding success, i.e., paying a bonus, increase effort in this case? I find that bonuses have not only an incentive but also an income effect. Overall, bonuses paid for success may...

Persistent link: https://www.econbiz.de/10012775692

Physician Payment Contracts in the Presence of Moral Hazard and Adverse Selection : The Theory and its Application to Ontario

Kantarevic, Jasmin - 2015

behavior. These features include: (1) physicians can choose a payment contract from a menu that includes an enhanced fee …-for-service contract and a blended capitation contract; (2) the capitation rate is higher and the cost-reimbursement rate is lower in the … blended capitation contract; (3) physicians sort selectively into the contracts based on their preferences; and (4) physicians …

Persistent link: https://www.econbiz.de/10013016351

Hidden Action, Identification, and Organization Design

Schnedler, Wendelin - 2010

Incentives often fail in inducing economic agents to engage in a desirable activity; implementability is restricted. What restricts implementability? When does re-organization help to overcome this restriction? This paper shows that any restriction of implementability is caused by an...

Persistent link: https://www.econbiz.de/10013135820

Reciprocity and Incentive Pay in the Workplace

Dur, Robert A. J. - 2010

We study optimal incentive contracts for workers who are reciprocal to management attention. When neither worker's effort nor manager's attention can be contracted, a double moral-hazard problem arises, implying that reciprocal workers should be given weak financial incentives. In a...

Persistent link: https://www.econbiz.de/10013147137

Job Assignments Under Moral Hazard : The Peter Principle Revisited

Koch, Alexander K. - 2008

The Peter Principle captures two stylized facts about hierarchies: first, promotions often place employees into jobs for which they are less well suited than for that previously held. Second, demotions are extremely rare. Why do organizations not correct 'wrong' promotion decision? This paper...

Persistent link: https://www.econbiz.de/10012773414

Double-Sided Moral Hazard in Job Displacement Insurance Contracts

Parsons, Donald O. - 2014

Job displacement insurance typically includes both unemployment benefits and lump-sum severance pay, and each has provoked policy concerns. Unemployment insurance concerns have centered on distorted job search/offer acceptance decisions by the worker, severance-induced firing cost concerns on...

Persistent link: https://www.econbiz.de/10013067317

The Response to Dynamic Incentives in Insurance Contracts with a Deductible : Evidence from a Differences-in-Regression-Discontinuities Design

Klein, Tobias J. - 2020

We develop a new approach to quantify how patients respond to dynamic incentives in health insurance contracts with a deductible. Our approach exploits two sources of variation in a differences-in-regression-discontinuities design: deductible contracts reset at the beginning of the year, and...

Persistent link: https://www.econbiz.de/10012837905

Asymmetric Information in the Labor Market, Immigrants and Contract Menu

Kar, Saibal - 2011

this phenomenon based on asymmetric information in the host country labor market. We focus on the design of a contract menu …

Persistent link: https://www.econbiz.de/10013129911

The Role of Sickness in the Evaluation of Job Search Assistance and Sanctions

van den Berg, Gerard J. - 2016

Unemployment insurance agencies may combat moral hazard by punishing refusals to apply to assigned vacancies. However, the possibility to report sick creates an additional moral hazard, since during sickness spells, minimum requirements on search behavior do not apply. This reduces the ex ante...

Persistent link: https://www.econbiz.de/10013001341