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This paper studies the interplay between deadlines and cognitive limitations. We analyze an agent's decision to complete a one-off task under a deadline. Postponing the task can be beneficial for the agent; missing the deadline, however, leads to a drop in the agent's rewards. If the agent...
Persistent link: https://www.econbiz.de/10011757775
This paper studies the interplay between deadlines and cognitive limitations. We analyze an agent's decision to complete a one-off task under a deadline. Postponing the task can be beneficial for the agent; missing the deadline, however, leads to a drop in the agent's rewards. If the agent...
Persistent link: https://www.econbiz.de/10011760092
Persistent link: https://www.econbiz.de/10011606377
We consider a brand manufacturer who can offer, next to its high-quality product, also a decoy good and faces competition by a competitive fringe that produces low quality. We show that the brand manufacturer optimally provides a decoy good to boost the demand for its main product if consumers'...
Persistent link: https://www.econbiz.de/10011557863
We consider a principal-agent model with moral hazard where the agent’s knowledge about the performance measure is ambiguous and he is averse towards ambiguity. We show that the principal may optimally provide no incentives or contract only on a subset of all informative performance measures....
Persistent link: https://www.econbiz.de/10014191015
We analyze the effects of minimum wages in a simple microeconomic model where several principals (potential employers) compete for one or several agents (workers) via their wage offers. A minimum wage changes this game by prohibiting wage offers below the imposed minimum wage, which results in...
Persistent link: https://www.econbiz.de/10012900600
This paper seeks to explore how an agent's incentives to perform influences her performance. We analyze this question in a simple principal-agent model, where the agent chooses how much effort to invest and which project to implement. We show that the relationship between the incentives to...
Persistent link: https://www.econbiz.de/10012865018
We examine the persistence of monopolies in markets with innovations when the outcome of research is uncertain. We show that for low success probabilities of research, the incumbent can seldom preempt the potential entrant. Then the efficiency effect outweighs the replacement effect. It is vice...
Persistent link: https://www.econbiz.de/10012710681
The standard agency model assumes that the agent does not care how his decisions influence others. This is a strong assumption, which we relax. We find that, although monetary incentives are effective also with sociallyattentive agents, the principal may optimally set none. This could explain...
Persistent link: https://www.econbiz.de/10012268393
Persistent link: https://www.econbiz.de/10012062018