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Do Managers with Limited Liability Take More Risky Decisions? An Information Acquisition Model
Malcomson, James - CESifo - 2010
Risk-neutral individuals take more risky decisions when they have limited liability. Risk-neutral managers may not when … actions. The resulting decisions may be less, rather than more, risky. Making a decision after acquiring information provides …
Persistent link: https://www.econbiz.de/10008572569
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Do Managers with Limited Liability Take More Risky Decisions? An Information Acquisition Model
Malcomson, James - Department of Economics, Oxford University - 2009
Risk-neutral individuals take more risky decisions when they have limited liability.  Risk-neutral managers may not … undesirable actions.  The resulting decisions may be less, rather than more, risky.  Making a decision after acquiring information …
Persistent link: https://www.econbiz.de/10008459580
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Incentives, Project Choice and Dynamic Multitasking
Szydlowski, Martin - Center for Mathematical Studies in Economics and … - 2012
I study the optimal choice of investment projects in a continuous time moral hazard model with multitasking. While in the first best, projects are invariably chosen by the net present value (NPV) criterion, moral hazard introduces a cutoff for project selection which depends on both a...
Persistent link: https://www.econbiz.de/10009001135
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Incentives to Motivate
Kvaløy, Ola; Schöttner, Anja - CESifo - 2014
We present a model in which a motivator can take costly actions - or what we call motivational effort - in order to reduce the effort costs of a worker, and analyze the optimal combination of motivational effort and monetary incentives. We distinguish two cases. First, the firm owner chooses the...
Persistent link: https://www.econbiz.de/10010877648
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Task Assignment under Agent Loss Aversion
Daido, Kohei; Morita, Kimiyuki; Murooka, Takeshi; … - School of Economics, Kwansei Gakuin University - 2013
We analyze a simple task-assignment model in which a principal assigns a task to one of two agents depending on the state. If the agents have standard concave utility, the principal assigns the task to an agent with the highest productivity in each state. In contrast, if the agents are loss...
Persistent link: https://www.econbiz.de/10010902089
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Loss Aversion, Stochastic Compensation, and Team Incentives
Daido, Kohei; Murooka, Takeshi - School of Economics, Kwansei Gakuin University - 2013
first-order risk aversion to wage uncertainty. This causes the agents to work harder when their low performance is …
Persistent link: https://www.econbiz.de/10010902090
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Family Ties and Organizational Design: Evidence from Chinese Private Firms
Cai, Hongbin; Li, Hongbin; Park, Albert; Zhou, Li-An - In: The Review of Economics and Statistics 95 (2013) 3, pp. 850-867
bonuses, hold higher positions, and are given more decision rights and job responsibilities than nonfamily managers in the …Analyzing data from a unique survey of managers of Chinese private firms, we investigate how family ties with firm … heads affect managerial compensation and job assignment. We find that family managers earn higher salaries and receive more …
Persistent link: https://www.econbiz.de/10011009930
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Wage Bargaining when Workers Have Fairness Concerns
Kragl, Jenny; Gogova, Martina - Verein für Socialpolitik - VfS - 2013
We analyze optimal labor contracts when the worker is inequity averse towards the employer. Welfare is maximized for an equal sharing rule of surplus between the worker and the firm. That is, profit sharing is optimal even if effort is contractible. If the firm can make a take-it-or leave-it...
Persistent link: https://www.econbiz.de/10010957968
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Incentive Design and Mis-Allocated Effort
Schnedler, Wendelin - Verein für Socialpolitik - VfS - 2013
Incentives often distort behavior: they induce agents to exert effort but this effort is not employed optimally. This paper proposes a theory of incentive design allowing for such distorted behavior. At the heart of the theory is a trade-off between getting the agent to exert effort and ensuring...
Persistent link: https://www.econbiz.de/10010958061
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On the value of relative comparisons in firms
Ramalingam, Abhijit - In: Economics Letters 124 (2014) 3, pp. 446-448
In a principal–agent model, we find that firms may not always benefit from the relative concerns of agents if such concerns are heterogeneous. Further, accounting for the influence of the environment on such concerns, profits are reduced relative to the no-comparisons benchmark.
Persistent link: https://www.econbiz.de/10010930738