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relationships, in particular trust, allow managers to arrange a business in a more productive way; high-trust firms are both more … profitable and faster growing. For example, if they are trusted, managers can delegate decisions to employees with confidence …
Persistent link: https://www.econbiz.de/10014290491
The allocation of decision rights is an integral component of designing organizational architecture. Economists have long understood the importance of co-locating decision rights with the knowledge that is valuable to those decisions. Following this prescription, marketing scholars have...
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In this paper we analyze a dynamic agency problem where contracting parties do not know the agent's future productivity at the beginning of the relationship. We consider a two-period model where both the agent and the principal observe the agent's second-period productivity at the end of the...
Persistent link: https://www.econbiz.de/10003783883
In this paper I consider the impact of a noisy indicator regarding a manager’s manipulative behavior on optimal effort … incentives and the extent of earnings management. The analysis in this paper extends a twotask, single performance measure LEN …. More specifically, the principal uses the indicator variable to prevent earnings management only under conditions where …
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Non-monotone incentive structures, which - according to theory - are able to induce optimal behavior, are often regarded as empirically less relevant for labor relationships. We compare the performance of a theoretically optimal non-monotone contract with a monotone one under controlled...
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