Similar Search Results

An optimal incentive contract to avert firm relocation : conference paper

Pollrich, Martin; Schmidt, Robert C. - 2014 - Preliminary and incomplete version

In a globalized economy, firms move production to other countries without turning a hair. A local policy maker who seeks to avert relocation faces a dynamic problem - incentivizing the firm to remain in its home country today does not guarantee that the firm also stays in the future. We...

Persistent link: https://www.econbiz.de/10010482509

Optimal delegated search with adverse selection and moral hazard

Ulbricht, Robert - In: Theoretical economics : TE ; an open access journal in … 11 (2016) 1, pp. 253-278

The paper studies a model of delegated search. The distribution of search revenues is unknown to the principal and has to be elicited from the agent in order to design the optimal search policy. At the same time, the search process is unobservable, requiring search to be self-enforcing. The two...

Persistent link: https://www.econbiz.de/10011672191

Learning, termination, and payout policy in dynamic incentive contracts

DeMarzo, Peter M.; Sannikov, Yuliy - 2016

We study a principal-agent setting in which both sides learn about future profitability from output, and the project can be abandoned/terminated if profitability is too low. With learning, shirking by the agent both reduces output and lowers the principal's estimate of future profitability. The...

Persistent link: https://www.econbiz.de/10011864825

Empowerment and the dark side of delegation

Kräkel, Matthias - 2018

The existing delegation literature has focused on different preferences of principal and agent concerning project selection, which makes delegating authority costly for the principal. This paper shows that delegation has a cost even when the preferences of principal and agent are exogenously...

Persistent link: https://www.econbiz.de/10011795221

The impact of incentive pay on corporate crime

Herold, Daniel - 2017

This paper presents a moral hazard model analyzing the agent's incentive to commit corporate crime. The principal can only observe profits which the agent can increase by committing crime or exerting effort. It is shown how different incentive contracts, i.e., thresholdlinear, capped bonus and...

Persistent link: https://www.econbiz.de/10011773464

Matching with Moral Hazard : Assigning Attorneys to Indigent Defendants

Kamali-Shahdadi, Behrang - 2015

matching problem. A novel aspect of this matching problem is the moral hazard component on the part of counsel. Within the … model, we show that holding the total expenditure for counsel fixed and changing the matching procedure to accommodate … defendants' and attorneys' preferences will make defendants worse off. More precisely, if we switch from random matching to …

Persistent link: https://www.econbiz.de/10013015784

Wealth and the Principal-Agent Matching

Fagandini, Paulo - 2018

I study the role the agent's wealth plays in the principal-agent matching with moral hazard and limited liability. I … wealth is distributed among agents in such a way that it reverses the standard result of positive assortative matching …

Persistent link: https://www.econbiz.de/10012912553

A repeated principal-agent model with on-the-job search

Herbold, Daniel - 2014

This paper analyzes how on-the-job search (OJS) by an agent impacts the moral hazard problem in a repeated principal-agent relationship. OJS is found to constitute a source of agency costs because efficient search incentives require that the agent receives all gains from trade. Further, the...

Persistent link: https://www.econbiz.de/10010388761

Reciprocity and incentive pay in the workplace

Dur, Robert A. J.; Non, Arjan; Roelfsema, Hein - 2010

We study optimal incentive contracts for workers who are reciprocal to management attention. When neither worker's effort nor manager's attention can be contracted, a double moral-hazard problem arises, implying that reciprocal workers should be given weak financial incentives. In a...

Persistent link: https://www.econbiz.de/10003941532

Relational incentive contracts with persistent private information

Malcomson, James M. - 2015 - This version: July 24, 2015

This paper investigates relational incentive contracts with continuous, privately-observed agent types that are persistent over time. With fixed agent types, full separation is not possible when continuation equilibrium payoffs following revelation are on the Pareto frontier of attainable...

Persistent link: https://www.econbiz.de/10011300994