Limited Liability and the Trade-off between Risk and Incentives

everal empirical findings have challenged the traditional trade-off between risk and incentives. By combining risk aversion and limited liability in a standard principal-agent model the empirical puzzle on the positive relationship between risk and incentives can be explained.

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Year of publication:	2007
Authors:	Kräkel, Matthias
Publisher:	Bonn : University of Bonn, Bonn Graduate School of Economics (BGSE)
Subject:	Risiko \| Ökonomischer Anreiz \| Agency Theory \| Risikoaversion \| Beschränkte Haftung \| Theorie \| limited liability \| piece rates \| risk aversion \| risk-incentives trade-off

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Series:	Bonn Econ Discussion Papers ; 3/2007
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	531241246 [GVK] hdl:10419/22978 [Handle] RePEc:zbw:bonedp:32007 [RePEc]
Classification:	D01 - Microeconomic Behavior: Underlying Principles ; M5 - Personnel Economics ; D82 - Asymmetric and Private Information ; J3 - Wages, Compensation, and Labor Costs
Source:	EconStor

Persistent link: https://www.econbiz.de/10010263185