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Incomplete and imperfect information for sales compensation
Valeanu, Raluca - In: Studies and Scientific Researches. Economics Edition (2010) 15
Sales force compensation represents the fix and / or variable payment by the company. To compensate agents based on the results, the company set a goal which is brought to their attention through the compensation plan. Applying the model of moral hazard, where the agent behavior cannot be...
Persistent link: https://www.econbiz.de/10008470719
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Dynamic Managerial Compensation: a Mechanism Design Approach
Garrett, Daniel; Pavan, Alessandro - Center for Mathematical Studies in Economics and … - 2009
We characterize the optimal incentive scheme for a manager who faces costly effort decisions and whose ability to generate profits for the firm varies stochastically over time. The optimal contract is obtained as the solution to a dynamic mechanism design problem with hidden actions and...
Persistent link: https://www.econbiz.de/10008597112
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Dynamic Managerial Compensation: a Mechanism Design Approach
Garrett, Daniel; Pavan, Alessandro - Collegio Carlo Alberto, Università degli Studi di Torino - 2009
We characterize the optimal incentive scheme for a manager who faces costly effort decisions and whose ability to generate profits for the firm varies stochastically over time. The optimal contract is obtained as the solution to a dynamic mechanism design problem with hidden actions and...
Persistent link: https://www.econbiz.de/10008518904
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Financial Frictions, Investment, and Institutions
Yafeh, Yishay; Ueda, Kenichi; Claessens, Stijn - International Monetary Fund (IMF) - 2010
Financial frictions have been identified as key factors affecting economic fluctuations and growth. But, can institutional reforms reduce financial frictions? Based on a canonical investment model, we consider two potential channels: (i) financial transaction costs at the firm level; and (ii)...
Persistent link: https://www.econbiz.de/10008680276
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Agency theory: choice-based foundations of the parametrized distribution formulation
Karni, Edi - In: Economic Theory 36 (2008) 3, pp. 337-351
Persistent link: https://www.econbiz.de/10005370740
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The Agency Problem in New Institutional Economics
Otáhal, Tomáš - In: Politická ekonomie 2009 (2009) 5, pp. 677-695
the theory of firm, the theory of market process and the theory of property rights. The second section is dedicated to the …
Persistent link: https://www.econbiz.de/10008545885
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Agency Revisited
Casadesus-Masanell, Casadesus-Masanell Ramón; Spulber, … - Fundación BBVA - 2007
The working paper presents a comprehensive overview of the principal-agent model that emphasizes the role of trust in the agency relationship. The analysis demonstrates that the legal remedy for breach of duty can result in a full-information efficient outcome eliminating both moral hazard and...
Persistent link: https://www.econbiz.de/10008685255
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Combinatorial agency
Babaioff, Moshe; Feldman, Michal; Nisan, Noam; Winter, Eyal - In: Journal of Economic Theory 147 (2012) 3, pp. 999-1034
We study a combinatorial variant of the classical principal-agent model. In our setting a principal wishes to incentivize a team of strategic agents to exert costly effort on his behalf. Agentsʼ actions are hidden and the principal observes only the outcome of the team, which depends...
Persistent link: https://www.econbiz.de/10011042925
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Review of Guillaume Plantin and Jean-Charles Rochet, When Insurers Go Bust: An Economic Analysis of the Role and Design of Prudential Regulation
Marshall, John - In: International Journal of the Economics of Business 16 (2009) 1, pp. 139-146
When Insurers Go Bust applies agency theory and the theories of adverse selection and moral hazard as the motivation …, and transparency. In consequence, ruin theory does not have an operational role. Theory is applied in familiar ways that … inappropriate emphasis on the general theory of excessive risk-taking, which tends to deflect attention from the specific nature of …
Persistent link: https://www.econbiz.de/10005268655
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Is Leverage Effective in Increasing Performance Under Managerial Moral Hazard?
Calcagno, R. - Tilburg University, Center for Economic Research - 2000
We consider a model in which the principal-agent relation between inside shareholders and the management affects the firm value.We study the effect of financing the project with risky debt in changing the incentive for a risk-neutral shareholder (the principal) to implement the project-value...
Persistent link: https://www.econbiz.de/10011091167