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Inequity Aversion in Tournament
Demougin, Dominique; Fluet, Claude - Centre Interuniversitaire de Recherche en Analyse des … - 2003
We consider the cost of providing incentives through tournaments when workers are inequity averse and performance … envy depending on the costs of assessing performance. More envious employees are preferred when these costs are high, less …
Persistent link: https://www.econbiz.de/10005100711
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Group vs. Individual Performance Pay When Workers Are Envious
Demougin, Dominique; Fluet, Claude - Centre Interuniversitaire sur le Risque, les Politiques … - 2003
providing incentives through group versus individual bonus schemes. When workers have a propensity for envy, either scheme may …
Persistent link: https://www.econbiz.de/10005696252
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Group vs. Individual Performance Pay When Workers Are Envious
Demougin, Dominique; Fluet, Claude - Centre Interuniversitaire de Recherche en Analyse des … - 2003
We compare the wage costs of providing incentives through group versus individual bonus schemes. When workers are envious, either scheme may be the least cost one owing to the trade-off between the dissatisfaction with the prospect of unequal pay and the incentives it generates Nous comparons...
Persistent link: https://www.econbiz.de/10005100898
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The impact of inequity aversion on relational incentive contracts
Kragl, Jenny - 2009
Trittbrettfahrerproblems und die Anreizwirkung von Neid. Im dritten Aufsatz wird relationalen Individualbonusverträgen ein relatives … wird für ein Beispiel gezeigt, dass die Zinsspanne, für die der Bonusvertrag das Turnier dominiert, im Neid der Agenten … to the literature, we find that inequity aversion may be beneficial: In the presence of envy, for a certain range of …
Persistent link: https://www.econbiz.de/10009467139
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You Don't Always Get What You Pay For
Schnedler, Wendelin - Alfred-Weber-Institut für Wirtschaftswissenschaften, … - 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/10005200592
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Default and Punishment in General Equilibrium
Dubey, Pradeep; Geanakoplos, John; Shubik, Martin - Cowles Foundation for Research in Economics, Yale University - 2001
We extend the standard model of general equilibrium with incomplete markets to allow for default and punishment. The equilibrating variables include expected delivery rates, along with the usual prices of assets and commodities. By reinterpreting the variables, our model encompasses a broad...
Persistent link: https://www.econbiz.de/10005087374
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Observing Unobservables: Identifying Information Asymmetries with a Consumer Credit Field Experiment
Karlan, Dean S.; Zinman, Jonathan - Economic Growth Center, Economics Department - 2005
Information asymmetries are important in theory but difficult to identify in practice. We estimate the empirical importance of adverse selection and moral hazard in a consumer credit market using a new field experiment methodology. We randomized 58,000 direct mail offers issued by a major South...
Persistent link: https://www.econbiz.de/10005146666
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Cashing by the hour: Why large law firms prefer hourly fees over contingent fees
Garoupa, Nuno; Gómez, Fernando - Department of Economics and Business, Universitat … - 2002
Large law firms seem to prefer hourly fees over contingent fees. This paper provides a moral hazard explanation for this pattern of behavior. Contingent legal fees align the interests of the attorney with those of the client, but not necessarily with those of the partnership. We show that the...
Persistent link: https://www.econbiz.de/10005772368
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Inequality of Opportunity in the Credit Market
Coco, Giuseppe; Pignataro, Giuseppe - Dipartimento di Scienze Economiche, Facoltà di Economia - 2010
Credit market imperfections can prevent the poor from making profitable investments. Under asymmetric information observable features, such as wealth and collateral, play an important role in determining who gets credit, in violation of the Equality of Opportunity principle. We define equality...
Persistent link: https://www.econbiz.de/10008542326
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A note on optimal commodity taxation with moral hazard and separable preferences
Panaccione, Luca; Ruscitti, Francesco - In: Economics Bulletin 30 (2010) 3, pp. 2380-2387
In this paper we show that differential commodity taxation is superfluous in an economy with moral hazard and separable preferences.
Persistent link: https://www.econbiz.de/10008492577