This paper investigates the implications of individuals' mistaken beliefs of their abilities on incentives in organizations using the principal-agent model of moral hazard. The paper shows that if effort is observable, then an agent's mistaken beliefs about own ability are always favorable to...

This paper incorporates egocentric comparisons into a human capital accumulation model and studies the evolution of positive self image over time. The paper shows that the process of human capital accumulation together with egocentric comparisons imply that positive self image of a cohort is...

This paper analyzes the implications of worker overestimation of productivity for firms in which incentives take the form of tournaments. Each worker overestimates his productivity but is aware of the bias in his opponent's self-assessment. The manager of the firm, on the other hand, correctly...

We study signal-dependent experimentation in the presence of accumulation and show that the passive-learner's action surprisingly coincides with the experimentor's when the unknown term is the one determining the decay rate of the stock, while they differ when the parameter being learned is the...

We discuss how six dimensions of the authentizotic psychological climate explain stress and affective well-being at work, and how stress and affective well-being explain self-reported individual performance. The sample comprises 199 employees from 118 organizations. The findings indicate the...

We examine the impact of agreements that prohibit superstars from switching their services to rivals on firms' ability to collude. Exclusivity (or non-compete) clauses are not uncommon in the sports, entertainment and professional services industries, but courts often refrain from enforcing them...

I analyze a simple model of hold-up with asymmetric information at the contracting stage. I show that contractual signalling and efficiency of investment can conflict if only quantity is contractible. This is because contracted quantity encourages investment in the relationship but also signals...

Two hypotheses are usually advanced to explain the East Asian twin financial and exchange rate crises in 1990's. The first, stresses market failure, namely the sudden shift in market sentiment that rapidly propagated itself regionally and which lead to financial turmoil. According to this view,...

This paper aims to trace the development of management accounting systems (MAS) in a Portuguese bank, where an activity based costing system (ABC) has been trialled for implementation over the past few years, as a means to improving the economy, efficiency and effectiveness of employee activity....

In the current paper we examine the role of forest carbon sequestration benefits in optimal forest management. When carbon benefits are considered not only the forested area is relevant, but also the flow of carbon between land and the atmosphere through the carbon cycle. To account for all...