When designing incentives for a manager, the trade-off between insurance and a "good" allocation of effort across …

Standard models of moral hazard predict a negative relationship between risk and incentives, but the empirical work has … incentives decreases with risk aversion, more risk-averse agents prefer lower-incentive contracts; thus, in the optimal contract …, incentives are positively correlated with endogenous risk. In contrast, if risk aversion is high enough, the possibility of …

This paper seeks to explore how an agent's incentives to perform influences her performance. We analyze this question … show that the relationship between the incentives to perform and the expected performance could be negative. The paper thus … offers a novel, non-behavioral explanation for the failure of incentives …

Employees often learn about their ability while working, and the resulting beliefs interact with pay incentives to … job, dynamic selection, effort, and variation in pay incentives. The empirical analysis is based on unique data from a US … which pay incentives affect employment outcomes, profits, and compensation. Under the implemented and the profit …

high-powered incentives; otherwise, bonuses perform better …

One of the standard predictions of the agency theory is that more incentives can be given to agents with lower risk … obtain that lower agent’s risk aversion unambiguously leads to higher incentives when the technology function linking …

incentives to affect these choices. It develops a multi-task model where employees makes choices between their assigned standard … tasks, for which the firm has a performance measure and provides incentives, and privately observed innovation opportunities …-powered incentives for standard tasks to encourage more innovation, yet in equilibrium employees undertake too few innovation. The …

In this paper, we analyze group incentives when a proportion of agents feel in- equity aversion as defined by Fehr and … show that a tournament provides strong incentives to agents who only care about their own payoff but that it is not …