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Self-respecting worker in the gig economy : a dynamic principal-agent model

Bihary, Zsolt; Csóka, Péter; Kerényi, Péter; … - 2021

wages. If the dynamically changing reference value capturing the worker’s demand is too high, then no contract is struck …

Persistent link: https://www.econbiz.de/10012582631

Optimal contracts with a risk-taking agent

Barron, Daniel; Georgiadis, George; Swinkels, Jeroen M. - In: Theoretical economics : TE ; an open access journal in … 15 (2020) 2, pp. 715-761

optimally offers a contract that makes the agent's utility concave in output. If the agent is risk-neutral and protected by … concavity constraint might bind for some outputs but not others. We characterize the unique profit-maximizing contract and show …

Persistent link: https://www.econbiz.de/10012308620

Observable strategies, commitments, and contracts

Wärneryd, Karl Erik - 2014

We consider rules (strategies, commitments, contracts, or computer programs) that make behavior contingent on an opponent's rule. The set of perfectly observable rules is not well defined. Previous contributions avoid this problem by restricting the rules deemed admissible. We instead limit the...

Persistent link: https://www.econbiz.de/10010437999

Flows and Performance with Optimal Money Management Contracts

Pegoraro, Stefano - 2019

weaker for managers with longer tenure. I consider an optimal incentive contract for money managers, and I provide an … compensation. In the optimal contract, flows become more sensitive to performance when the manager faces stronger incentives from … the compensation contract. With learning, the manager's incentives become stronger after good performance, so that a …

Persistent link: https://www.econbiz.de/10012860014

How Ego-Threats Facilitate Contracts Based on Subjective Evaluations

Sebald, Alexander - 2008

We show that individuals' desire to protect their self-esteem against ego-threatening feedback can mitigate moral hazard in environments with purely subjective performance evaluations. In line with evidence from social psychology we assume that agents' react aggressively to evaluations by the...

Persistent link: https://www.econbiz.de/10012723086

Wage Floors, Imperfect Performance Measures, and Optimal Job Design

Kragl, Jenny; Schöttner, Anja - 2012

We analyze the effects of lower bounds on wages on optimal job design within firms. In our model, two tasks affect firm value and an imperfect performance measure. Due to cost advantages of specialization, assigning the tasks to different agents is efficient. Yet a sufficiently large wage floor...

Persistent link: https://www.econbiz.de/10014044149

Hidden Action, Identification, and Organization Design

Schnedler, Wendelin - 2010

Incentives often fail in inducing economic agents to engage in a desirable activity; implementability is restricted. What restricts implementability? When does re-organization help to overcome this restriction? This paper shows that any restriction of implementability is caused by an...

Persistent link: https://www.econbiz.de/10013135820

Optimal Incentive Contracts Under Moral Hazard When the Agent is Free to Leave

Englmaier, Florian - 2010

We characterize optimal incentive contracts in a moral hazard framework extended in two directions. First, after effort provision, the agent is free to leave and pursue some ex-post outside option. Second, the value of this outside option is increasing in effort, and hence endogenous. Optimal...

Persistent link: https://www.econbiz.de/10013141421

Detrimental Incentive Mechanisms in Dynamic Principal-Agent Relationships

Rauber, Tom; Weinschenk, Philipp - 2023

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

Wage floors and optimal job design

Kragl, Jenny; Schöttner, Anja - 2011

We analyze the effects of lower bounds on wages, e.g., minimum wages or liability limits, on job design within firms. In our model, two tasks contribute to non-veriable firm value and affect an imperfect performance measure. The tasks can be assigned to either one or two agents. In the absence...

Persistent link: https://www.econbiz.de/10009125582