In the context of principal-agent theory risk is largely seen as a source that causes inefficiencies and lowers incentives and accordingly is not in the principal’s interest. In this paper I compare two different designs of a collective tournament where output in a team is generated through a...

Several empirical findings have challenged the traditional trade-off between risk and incentives. By combining risk aversion and limited liability in a standard principal-agent model the empirical puzzle on the positive relationship between risk and incentives can be explained.

Der vorliegende Beitrag begründet die Vorteilhaftigkeit von Arbeitszeitflexibilisierung bei Produktmarktunsicherheiten theoretisch über die Existenz von Arbeitszeitkonten. Das Arbeitszeitkonten Modell kombiniert dabei effizienzlohn und versicherungstheoretische Aspekte. Die Lösungen sind...

Consider an agent who can costlessly add mean-preserving noise to his output. To deter such risk-taking, the principal optimally offers a contract that makes the agent's utility concave in output. If the agent is risk-neutral and protected by limited liability, this concavity constraint binds...