We study the effect of physician incentives in an HMO network. Physician incentives are controversial because they may … induce doctors to make treatment decisions that differ from those they would chose in the absence of incentives. We set out a …'s incentive contract provides a typical physician an increase, at the margin, of $0.10 in income for each $1.00 reduction in …

This paper provides the foundations of a general theory of information and the capital market. We show that in a pure …, and, in particular, they may behave in a risk averse manner, paying attention to own risk (which traditional theory …

talented workers leads to an escalating reliance on performance pay and other high-powered incentives, thereby shifting effort … incentives downward in order to extract rents. More generally, as declining market frictions lead employers to compete more …, while inequality tends to rise monotonically. Bonus caps and income taxes can help restore balance in agents' incentives and …