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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 …
Persistent link: https://www.econbiz.de/10011848346
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 …
Persistent link: https://www.econbiz.de/10012972627
risk and incentives. Using data from the 1998 Workplace Employment Relations Survey (WERS) representing a cross-section of …
Persistent link: https://www.econbiz.de/10013137206
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 …
Persistent link: https://www.econbiz.de/10013075605
This article explores a dynamic moral hazard setting in which a principal hires a team of agents for a project. As the project generates revenue upon completion, the principal incentivizes agents' efforts by designing bonuses for success. If bonuses are provided through spot or...
Persistent link: https://www.econbiz.de/10014353011
high-powered incentives; otherwise, bonuses perform better …
Persistent link: https://www.econbiz.de/10013247162
This note demonstrates how performance measure congruity and noise determine an agency's total surplus within an linear agency framework with multiple tasks. It provides a decomposition of agency costs, leading back to a congruity index previously proposed in the literature. In addition, it...
Persistent link: https://www.econbiz.de/10010383032
When designing incentives for a manager, the trade-off between insurance and a "good" allocation of effort across …
Persistent link: https://www.econbiz.de/10003379118
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 …
Persistent link: https://www.econbiz.de/10012865018
under which delegation changes the scope of peer sanction and thus influences the implicit incentives generated by the … information regarding the effient decision. We show that implicit incentives under delegation are strongest in diverse teams and …
Persistent link: https://www.econbiz.de/10013309991