talented workers leads to an escalating reliance on performance pay and other high-powered incentives, thereby shifting effort … incentives downward in order to extract rents. More generally, as declining market frictions lead employers to compete more …, while inequality tends to rise monotonically. Bonus caps and income taxes can help restore balance in agents' incentives and …

result can rationalize the high pay differential between CEOs and divisional managers. An increase in the synergy between two … particular agents can lead to a third agent being endogenously excluded from the team, even if his own synergy is unchanged. This … result has implications for optimal team composition and firm boundaries. …

result can rationalize the high pay differential between CEOs and divisional managers. An increase in the synergy between two … particular agents can lead to a third agent being endogenously excluded from the team, even if his own synergy is unchanged. This … result has implications for optimal team composition and firm boundaries. …

market competition on the performance-pay sensitivity of CEOs, and contrast it with the effect for department managers and … reform, decreased the sensitivity of pay to performance of CEOs, with no significant effects found for other managers or … costs leads to weaker managerial incentives. …