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negotiate contracts. In line with contract theory, the contractibility of the outcome plays a crucial role when effort is a …-compatible contracts. Communication is helpful, since it may reduce strategic uncertainty. If the outcome is non-contractible, in most … cases low effort is chosen whenever effort is a hidden action. However, communication leads the players to agree on larger …
Persistent link: https://www.econbiz.de/10014105234
This paper analyzes the impact of agents' risk aversion and other agency parameters on optimal bias in the performance measures used for incentive contracts. Prior research has shown that the limited liability of the agent results in a demand for accounting systems that are stringent compared to...
Persistent link: https://www.econbiz.de/10011544458
I examine whether stochastic contracts benefit the principal in the setting of moral hazard and loss aversion. Incorporating that the agent is expectation-based loss averse and allowing the principal to add noise to performance signals, I find that stochastic contracts reduce the principal's...
Persistent link: https://www.econbiz.de/10012695509
We conduct a laboratory experiment with agents working on and principals benefiting from a real effort task in which the agents' effort/performance can only be evaluated subjectively. Principals give subjective performance feedback to agents and agents have an opportunity to sanction principals....
Persistent link: https://www.econbiz.de/10013138953
We introduce a dynamic principal-agent model to understand the nature of contracts between an employer and an independent gig worker. We model the worker’s self-respect with an endogenous participation constraint; he accepts a job offer if and only if its utility is at least as large as his...
Persistent link: https://www.econbiz.de/10013223230
others who subjectively evaluate their performance whenever this assessment falls short of the individual's self-evaluation …' self-evaluation can be interpreted as an unkind act that triggers a negatively reciprocal response not only if the …
Persistent link: https://www.econbiz.de/10009742622
Persistent link: https://www.econbiz.de/10009724209
This paper addresses the question, what metrics should be used for performance evaluation and in particular how they …
Persistent link: https://www.econbiz.de/10010442171
and not on the public signal. Nonetheless, public information is valuable as it facilitates truthful subjective evaluation …
Persistent link: https://www.econbiz.de/10010334146
and not on the public signal. Nonetheless, public information is valuable as it facilitates truthful subjective evaluation …
Persistent link: https://www.econbiz.de/10010313115