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This paper studies how social relationships between managers and employees affect relational incentive contracts. To this end we develop a simple dynamic principal-agent model where both players may have feelings of altruism or spite toward each other. The contract may contain two types of...
Persistent link: https://www.econbiz.de/10010326344
This paper studies how social relationships between managers and employees affect relational incentive contracts. To this end we develop a simple dynamic principal-agent model where both players may have feelings of altruism or spite toward each other. The contract may contain two types of...
Persistent link: https://www.econbiz.de/10010282065
This paper studies the role of match quality for contractual arrangements, wage dynamics and workers' retention. We develop a model in which profit maximizing firms offer a performance-based pay arrangement to retain workers with relatively high match-specific productivity. The key implications...
Persistent link: https://www.econbiz.de/10012947375
Recent regulation and legislation, along with the growing influence of compensation consultants and proxy advisors, have led to an increase in performance-contingent awards. A majority of these awards contain performance conditions tied explicitly to accounting measures. Both the structure of...
Persistent link: https://www.econbiz.de/10013031959
This paper studies how altruism between managers and employees affects relational incentive contracts. To this end we develop a simple dynamic principal-agent model where both players may have feelings of altruism or spite toward each other. The contract may contain two types of incentives for...
Persistent link: https://www.econbiz.de/10013082165
Using data that includes specific contractual details of Relative Performance Evaluation (RPE) contracts granted to executives for 1,833 firms for the period 1998 to 2012, we develop new methods to characterize RPE awards and measure their value and incentive properties. The frequency in the use...
Persistent link: https://www.econbiz.de/10013059189
I analyze how a firm should elicit advice from an expert on when to terminate a project with a stochastic lifespan. The firm cannot directly observe the project's lifespan, but imperfectly monitors its current state by observing incremental output. The expert directly observes the state of the...
Persistent link: https://www.econbiz.de/10012922810
The paper broadens the focus of empirical research on salesforce management to include multitasking settings with multidimensional incentives, where salespeople have private information about customers. This allows us to ask novel substantive questions around multidimensional incentive design...
Persistent link: https://www.econbiz.de/10013231656
Inspired by a recent observation about an online retail company, this paper explains why a firm may find it optimal to offer an exit bonus to recent hires so as to induce self-selection. We study a double adverse selection problem, in which the principal can neither observe agents’ commitment...
Persistent link: https://www.econbiz.de/10010224783
This paper studies how firms can efficiently incentivize supervisors to truthfully report employee performance. To this end, I develop a dynamic principal-supervisor-agent model. The supervisor is either selfish or altruistic towards the agent, which is observable to the agent but not to the...
Persistent link: https://www.econbiz.de/10010226565