This paper investigates whether observed executive compensation contracts are designed to provide risk-taking incentives in addition to effort incentives. We develop a stylized principal-agent model that captures the interdependence between firm risk and managerial incentives. We calibrate the...

A worker's utility may increase with his income, but envy can make his utility decline with his employer's income. This article uses a principal-agent model to study profit-maximizing contracts when a worker envies his employer. Envy tightens the worker's participation constraint and so calls...

The debate on convergence and globalisation of national economies emphasises the role of Multinational Corporations (MNCs) with regard to the export of homecountry policies in countries where they have their plants. MNCs set a process of change in motion in which local companies attempt to catch...