This paper presents a market equilibrium model of CEO assignment, pay and incentives under risk aversion and heterogeneous moral hazard. Each of the three outcomes can be summarized by a single closed-form equation. In assignment models without moral hazard, allocation depends only on firm size...

This paper shows that the informativeness principle, as originally formulated by Holmstrom (1979), does not hold if the first-order approach is invalid. We introduce a "generalized informativeness principle" that takes into account non-local incentive constraints and holds generically, even...

We exploit recent decades of US state-level reforms to the generosity of workers' compensation programs to estimate the associated moral hazard, utilizing an event- study design and analyzing 9 separate reform categories. The reforms vary - some affecting benefit size, some the probability of...

We investigate the factors driving workers' decisions to generate public goods inside an organization through a randomized solicitation of workplace improvement proposals in a medical center with 1200 employees. We find that pecuniary incentives, such as winning a prize, generate a threefold...

Vertical rebates are prominently used across a wide range of industries. These con- tracts may induce greater retail effort, but may also prompt retailers to drop competing products. We study these offsetting efficiency and foreclosure effects empirically, using data from one retailer. Using a...