The empirical literature shows that management incentives often reduce corporate tax aggressiveness. Focussing on the riskiness of tax aggressiveness this paper offers one explanation for the observed negative relation. Using an agency framework, I analyze the manager's choice of effort...

One of the standard predictions of the agency theory is that more incentives can be given to agents with lower risk aversion. In this paper, we show that this relationship may be absent or reversed when the technology is endogenous and projects with a higher efficiency are also riskier. Using a...

We examine optimal information flows between a manager and a worker who is in charge of evaluating a parameter of interest, e.g. the value of a project. The manager may possesses information about the parameter, and, if informed, may divulge her information to the worker. We show that...

Several experimental studies have demonstrated the importance of non-monetary preferences in determining agents' response to control and delegation when monetary incentives between agents and principals are not aligned, but little is known about how such preferences influence the principle agent...

We develop a model to show how agency conflicts, free rider effects and monitoring costs interact to affect optimal team size and workers' incentive contracts. Team size increases with project risk, decreases with profitability, and decreases with monitoring costs as a proportion of output. Our...

We study an organization, consisting of a manager and a worker, whose success depends on its ability to estimate a payoff-relevant but unknown parameter. If the manager has private information about this parameter, she has an incentive to conceal it from the worker in order to motivate him to...

We analyze competition through incentive contracts for managers in duopoly. Privately informed managers exert surplus enhancing effort that generates an externality on the rival. Asymmetric information on imperfectly correlated shocks creates a two-way distortion of efforts under strategic...

This paper studies team design in the context of a standard risk-neutral principal-agent model with contractual constraints. I introduce heterogeneity in agents' technologies in terms of how agents shift probability mass across states of nature when they exert effort. Moral hazard and...

We study optimal team design. In our model, a principal assigns either heterogeneous agents to a team (a diverse team) or homogenous agents to a team (a specialized team) to perform repeated team production. We assume that specialized teams exhibit a productive substitutability (e.g.,...

A number of the largest U.S. firms have been found guilty of labor discrimination despite having policies in place designed to avoid that outcome. This paper diagnoses the phenomenon and proposes contractual and regulatory solutions to ameliorate the situation. Existing research (e.g., Becker...