Empirical and experimental papers nd that high-powered incentives may re-duce performance rather than improve it; a phenomenon referred to as "chokingunder pressure". We show that competition for high ability workers neverthelessleads rms to oer high bonus payments, thereby deliberately...

The introduction of the accounting standards SFAS 123R and IFRS 2 forexecutive stock options has led to an important change. As companies arenow forced to value their stock options at grant date for accounting purposes,the robustness of prices against the choice of certain valuation models...

One of the main issues of the reform regarding a professor’s remuneration at German universitiesis the introduction of a performance-dependent salary. This paper applies relative rank ordertournaments to special performance benefits at university level. It turns out that the awardingprocedure...

Incentives often fail in inducing economic agents to engage in a desirableactivity; implementability is restricted. What restricts implementability?When does re-organization help to overcome this restriction?This paper shows that any restriction of implementabilityis caused by an identification...

In dieser Arbeit untersuchen wir Höhe und Struktur der Vergütung von Fondsmanagern underklären diese durch Eigenschaften des Arbeitnehmers, des Arbeitgebers und desArbeitsplatzes. Die Vergütungshöhe hängt primär von der Bedeutung des Arbeitsplatzes imUnternehmen ab, die...

Why does individual performance pay seem to prevail in humancapital intensive industries? We present a model that may explainthis. In a repeated game model of relational contracting, we ana-lyze the conditions for implementing peer dependent incentive regimeswhen agents possess indispensable...

The potentially adverse labor market effects of severance pay mandates are a continuingsource of policy concern. In a seminal study, Lazear (1990) found that contract avoidance ofseverance pay firing costs was theoretically simple – a bonding scheme would do – but thatempirically the labor...

We study compensation packages in family and non-family firms. Using matched employeremployeedata for a representative sample of French establishments, we first show thatfamily firms pay on average lower wages to their workers. We find that part of this wage gapis due to differences in...

Following tournament theory, incentives will be rather low if the contestants ofa tournament are heterogeneous. We empirically test this prediction using alarge dataset from the German Hockey League. Our results show that indeed theintensity of a game is lower if the teams are more...

We empirically investigate the impact of incentive scheme structure on the degree ofcooperation in firms using a unique and representative data set. Combining employee surveydata with detailed firm level information on the relative importance of individual, team, andcompany performance for...