Showing 1 - 10 of 410
We develop a new approach to quantify how patients respond to dynamic incentives in health insurance contracts with a … large Dutch health insurer we find that individuals are forward-looking. Changing dynamic incentives by increasing the … annual level. The response to dynamic incentives is an important part of the overall effect of cost-sharing schemes on …
Persistent link: https://www.econbiz.de/10012837905
We consider an economy where individuals privately choose effort and trade competitively priced securities that pay off with effort-determined probability. We show that if insurance against a negative shock is sufficiently incomplete, then standard functional form restrictions ensure that...
Persistent link: https://www.econbiz.de/10013071425
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
We develop a model of strategic contractual incompleteness that identifies conditions under which principals might omit even costlessly verifiable terms. We then use experiments to test comparative statics predictions of the model. While it is well known that verifiability imperfections can...
Persistent link: https://www.econbiz.de/10013031190
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
Empirical literature on moral hazard focuses exclusively on the direct impact of asymmetric information on market outcomes, thus ignoring possible repercussions. We present a field experiment in which we consider a phenomenon that we call second-degree moral hazard – the tendency of the supply...
Persistent link: https://www.econbiz.de/10013061956
comparison group in China, we examine how both psychological and financial incentives, together with attitudes toward risk, may … rank-based financial incentives. Our results show that performance-ranking information had a significant motivational … effect on average performance for students, but not for that of workers. Adding financial incentives based on rank provided …
Persistent link: https://www.econbiz.de/10013009501
Labor turnover creates longer term career concerns incentives that motivate employees in addition to the short term … monetary incentives provided by the current employer. We analyze how these incentives interact and derive implications for the … incentives' and 'good reputational incentives'. We show that the principal optimally designs contracts to create ambiguity about …
Persistent link: https://www.econbiz.de/10013318646
quality is known more precisely. Incentives then are easier to provide because the agent has less room to manipulate the …
Persistent link: https://www.econbiz.de/10013135822
. It shows that human capital accumulation strengthens the power of incentives and allows the principal to provide the …
Persistent link: https://www.econbiz.de/10013058309