We present a sorting model in which workers with greater ability and greater risk tolerance move into performance pay … confirm testable implications drawn from our sorting model. First, prior to controlling for earnings, workers in performance …. While these findings support the sorting model, they would not be suggested by the classic agency model …

We present a sorting model in which workers with greater ability and greater risk tolerance move into performance pay … confirm testable implications drawn from our sorting model. First, prior to controlling for earnings, workers in performance …. While these findings support the sorting model, they would not be suggested by the classic agency model. …

We present a sorting model in which workers with greater ability and greater risk tolerance move into performance pay … confirm testable implications drawn from our sorting model. First, prior to controlling for earnings, workers in performance …. While these findings support the sorting model, they would not be suggested by the classic agency model. …

A main prediction of agency theory is the well known risk-incentive trade-off. Incentive contracts should be found in …

, tournament, and revenue sharing) compared to the fixed payment scheme. This difference is largely driven by productivity sorting … the sorting decision in a systematic way. Moreover, self-reported effort is significantly higher in all variable pay … representative sample. In sum, our findings underline the importance of multi-dimensional sorting, i.e., the tendency for different …