People are generally assumed to shy away from activities generating stochastic rewards, thus requiring extra compensation for handling any additional risk. In contrast with this view, neuroscience research with animals has shown that stochastic rewards may act as a powerful motivator. Applying...

In light of recent discussions about shifting employees from traditional workplaces to virtual employment, we are motivated by the question of whether this phenomenon will end up saving lives even in the absence of an infectious disease outbreak. Motor vehicle incidents are the leading cause of...

The present paper aims to contribute to the literature on the foundations of incomplete contracts by providing conditions under which simple delegation of authority is the solution to the complete-contracting problem of the parties. We consider a hold-up framework where both parties profit from...

Using a German employer-employee matched panel data set this paper examines the effects of High Performance Workplace Systems (HPWSs) on labor productivity (defined as sales per worker) and labor efficiency (defined as the inverse of unit labor costs). The estimation results indicate that simple...

We explore the optimal delegation of decision rights by a principal to a better informed but biased agent. In an infinitely repeated game a long lived principal faces a series of short lived agents. Every period they play a cheap talk game ala Crawford and Sobel (1982) with constant bias,...

It has been claimed that the market fosters selfishness and thereby undermines the moral basis of society. This thesis has been developed with an emphasis on market exchange. Everyday life is, however, predominantly shaped by interactions in the workplace rather than by shopping behaviour. This...

This paper studies a partial-contracting model where an agent may provide effort to increase a project's scope before some later decisions have to be taken. Consistent with existing empirical evidence, we find a positive relationship between exogenous risk and delegation. That is, we show that...

In recent decades, many firms offered more discretion to their employees, often increasing the productivity of effort but also leaving more opportunities for shirking. These high-performance work systems are difficult to understand in terms of standard moral hazard models. We show experimentally...

Using a unique new cross-national survey of Japanese and Korean workers, we report the first systematic evidence on the effects on employee voice of High Performance Work Practices (HPWPs) from the two economies which are noted for the wide use of HPWPs. We find for both nations that: (i)...

The poor performance often attributed to many public employment services may be explained in part by a delegation problem between the central office and local job centers. In markets characterized by frictions, job centers function as match-makers, linking job seekers with relevant vacancies....