Empirical studies of the principal-agent relationship find that extrinsic incentives work in many instances, linking rewards to performance increases effort, but that they can also backfire, reducing effort. Intrinsic motivation, the internal drive to work to master a skill or to improve one's...

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...

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...

Our study analyzes the consequences of workers' participation in the wage setting process on effort exertion. The experimental design is based on a modified giftexchange game where the degree of workers' involvement in the wage setting process is systematically varied among the workers. The...

Are monetary and non-monetary incentives used as substitutes in motivating effort? I address this question in a laboratory experiment in which the choice of the job characteristics (i.e., the mission) is part of the compensation package that principals can use to influence the agents' effort....

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...

Dieser Beitrag untersucht die Entwicklung der Akzeptanz der Empfehlung G.13 Satz 1 des Deutschen Corporate Governance Kodex (in der Fassung vom 16. Dezember 2019, vormals 4.2.3 Abs. 4 Satz 1), die für vorzeitige Vertragsbeendigungen von Vorstandsmitgliedern Abfindungsobergrenzen vorsieht. Die...

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 con- tract may contain two types of incentives for...

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...