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Schnedler, Wendelin - 2007

Consider a principal-agent relationship in which more effort by the agent raises the likelihood of success. Does rewarding success, i.e., paying a bonus, increase effort in this case? I find that bonuses have not only an incentive but also an income effect. Overall, bonuses paid for success may...

Persistent link: https://www.econbiz.de/10003592884

Should you allow your agent to become your competitor? : On non-compete agreements in employment contracts

Kräkel, Matthias (contributor); Sliwka, Dirk (contributor) - 2006

We discuss a principal-agent model in which the principal has the opportunity to include a non-compete agreement in the employment contract. We show that not imposing such an agreement can be beneficial for the principal as the possibility to leave the firm generates implicit incentives for the...

Persistent link: https://www.econbiz.de/10003301668

Limited liability and the trade-off between risk and incentives

Kräkel, Matthias - 2007

Several empirical findings have challenged the traditional trade-off between risk and incentives. By combining risk aversion and limited liability in a standard principal-agent model the empirical puzzle on the positive relationship between risk and incentives can be explained.

Persistent link: https://www.econbiz.de/10010383029

Relational Incentives Theory

Gallus, Jana; Reiff, Joseph; Kamenica, Emir; Fiske, … - 2021

Our life is built around coordinating efforts with others. This usually involves incentivizing others to do things, and sustaining our relationship with them. Using the wrong incentives backfires: it lowers effort and tarnishes our relationships. But what constitutes a ‘wrong’ incentive? And...

Persistent link: https://www.econbiz.de/10013211786

Information and Communication Technology, Hierarchy, and Job Design

Gerten, Elisa; Beckmann, Michael; Kräkel, Matthias - 2022

In recent decades, information and communication technology (ICT) has been associated with far-reaching changes in the design of jobs. However, it still remains unclear whether these changes will lead to more centralization or more decentralization in firms. Previous literature on this debate...

Persistent link: https://www.econbiz.de/10014078210

Emotions and the Optimality of Unfair Tournaments

Kräkel, Matthias - 2005

-order tournaments which are frequently used in practice. Tournaments seem to be an appropriate starting point for this concept because … from emotional workers. In this case, he clearly prefers unfair to fair tournaments. Furthermore, the concept of emotions … is used to explain the puzzling findings on the oversupply of effort in experimental tournaments. …

Persistent link: https://www.econbiz.de/10010334042