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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
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
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
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
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
This paper studies the effect of disclosing conflicts of interests on strategic communication when the sender has lying … costs. I present a simple economic mechanism under which such disclosure often leads to more informative, but at the same … naive or delegating receivers; disclosure is thus not a Pareto-improvement among receivers. I identify general conditions of …
Persistent link: https://www.econbiz.de/10011490047
This paper studies the effect of disclosing conflicts of interest on strategic communication when the sender has lying … costs. I present a simple economic mechanism under which such disclosure often leads to more informative, but at the same … delegating receivers; disclosure is thus not a Pareto-improvement among receivers. I identify general conditions of the …
Persistent link: https://www.econbiz.de/10011674150
This paper studies the effect of disclosing conflicts of interest on strategic communication when the sender has lying … costs. I present a simple economic mechanism under which such disclosure often leads to more informative and, at the same … or delegating receivers. Disclosure is thus not a Pareto-improvement among receivers. I identify general conditions of …
Persistent link: https://www.econbiz.de/10012625514
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
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