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Implementing efficient market structure
Grimm, Veronika; Riedel, Frank; Wolfstetter, Elmar - 2000
This article studies the design of optimal mechanisms to regulate entry in natural oligopoly markets, assuming the …
Persistent link: https://www.econbiz.de/10001474245
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Strategic delegation in experimental markets
Huck, Steffen; Müller, Wieland; Normann, Hans-Theo - 2000
contracts which determine their managers' salaries. One contract simply gives managers incentives to maximize firm profits …, while the second contract gives an additional sales bonus. Although theory predicts the second contract to be chosen, it is … only rarely chosen in the experimental markets. This behavior is rational given that managers do not play according to the …
Persistent link: https://www.econbiz.de/10001489460
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Dynamic managerial compensation : on the optimality of seniority-based schemes
Garrett, Daniel F.; Pavan, Alessandro - 2011
possible justification for the practice of putting more stocks and options in the packages of managers with a longer tenure in … risk-averse managers. We find that risk-aversion reduces, and in some cases can even revert, the profitability of seniority …
Persistent link: https://www.econbiz.de/10008665264
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Dynamic managerial compensation : on the optimality of seniority-based schemes
Garrett, Daniel F.; Pavan, Alessandro - 2014
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 either increase or decrease with tenure. However, risk...
Persistent link: https://www.econbiz.de/10010476876
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Stock options and chief executive officer compensation
Armstrong, Christopher (contributor);  … - 2007
Although stock options are commonly observed in chief executive o±cer (CEO) compensation contracts, there is theoretical controversy about whether stock options are part of the optimal contract. Using a sample of Fortune 500 companies, we solve an agency model calibrated to the company-specific...
Persistent link: https://www.econbiz.de/10003782064
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Mergers, investment decisions and internal organisation
Banal-Estañol, Albert; Macho-Stadler, Inés; … - 2003
We analyse the effects of investment decisions and firms' internal organisation on the efficiency and stability of horizontal mergers. In our framework economies of scale are endogenous and there might be internal conflict within merged firms. We show that often stable mergers do not lead to...
Persistent link: https://www.econbiz.de/10001771977
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Common agency equilibria with discrete mechanisms and discrete types
Martimort, David; Stole, Lars A. - 2001
This paper characterizes the equilibrium sets of an intrinsic common agency game with discrete types and direct revelation mechanisms. After presenting a general algorithm to find the pure -strategy equilibria of this game, we use it to characterize these equilibria when the two principals...
Persistent link: https://www.econbiz.de/10001624291
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Moral hazard, renegotiation and forgetfulness
Squintani, Francesco - 1999
Persistent link: https://www.econbiz.de/10001426299
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Competition of politicians for incentive contracts and elections
Gersbach, Hans - 2001
When politicians have lower discount factors than voters, democratic elections cannot sufficiently motivate politicians to undertake long-term socially beneficial projects. When politicians can offer incentive contracts which become effective upon reelection, the hierarchy of contracts and...
Persistent link: https://www.econbiz.de/10014460948
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Fairness, incentives and contractual incompleteness
Fehr, Ernst - 2001
We show that concerns for fairness may have dramatic consequences for the optimal provision of incentives in a moral hazard context. Incentive contracts that are optimal when there are only selfish actors become inferior when some agents are concerned about fairness. Conversely, contracts that...
Persistent link: https://www.econbiz.de/10014460980