We study the optimal dynamics of incentives for a manager whose ability to generate cash .ows changes stochastically … with time and is his private information. We show that, in general, the power of incentives (or "pay for performance") may … power of incentives later in the relationship. Our results follow from a new variational approach that permits us to tackle …

Several empirical findings have challenged the traditional view on the trade-off between risk and incentives. By … relationship between risk and incentives can be explained. Increasing risk leads to a less informative performance signal. Under …-powered incentives. …

Several empirical findings have challenged the traditional view on the trade-off between risk and incentives. By … relationship between risk and incentives can be explained. Increasing risk leads to a less informative performance signal. Under …-powered incentives. -- moral hazard ; limited liability ; risk-incentive relationship …

One of the standard predictions of the agency theory is that more incentives can be given to agents with lower risk … obtain that lower agent's risk aversion unambiguously leads to higher incentives when the technology function linking …

that show, in a very general setting, that the choice between work effort and leisure under given linear incentives depends …