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Optimal incentive contracts for a worker who envies his boss

Dur, Robert; Glazer, Amihai - 2004

A worker's utility may increase in his own income, but envy can make his utility decline with his employer's income … various assumptions about the object and generality of envy. Envy amplifies the effect of incentives on effort and, therefore …, increases optimal incentive pay. Moreover, envy can make profitsharing optimal, even when the worker's effort is fully …

Persistent link: https://www.econbiz.de/10010261264

Incentives and workers' motivation in the public sector

Delfgaauw, Josse; Dur, Robert - 2004

Civil servants have a bad reputation of being lazy. However, citizens' personal experiences with civil servants appear to be significantly better. We develop a model of an economy in which workers differ in laziness and in public service motivation, and characterise optimal incentive contracts...

Persistent link: https://www.econbiz.de/10010261219

The desire for impact

Dur, Robert A. J.; Glazer, Amihai - 2005

This paper explores the meaning and implications of the desire by workers for impact. We find that this impact motive can make firms in a competitive labor market act as monopsonists, lead workers with the same characteristics but at different firms to earn different wages, may alleviate the...

Persistent link: https://www.econbiz.de/10010261327

Sustainable social spending in a greying economy with stagnant public services: Baumol's cost disease revisited

van der Ploeg, Frederick - 2006

Baumol's cost disease states that relatively high productivity growth in manufacturing induces a steady increase in the relative price of human services. If demand for these services is inelastic or manufactured goods are necessities, the budget share of these services inexorably rises over time...

Persistent link: https://www.econbiz.de/10010276200

EVA and the controllability-congruence trade-off : an empirical investigation

Ponssard, Jean-Pierre; Larmande, François - 2004

Incentives theory suggests that compensation schemes should be analyzed along two dimensions: controllability and congruence. Most schemes cannot satisfy both criteria at once. EVA bonus schemes, a major managerial innovation of the 90's, favor the congruence criterion. This paper questions ist...

Persistent link: https://www.econbiz.de/10010261243

Monitoring a common agent : implications for financial contracting

Khalil, Fahad; Martimort, David; Parigi, Bruno Maria - 2005

We study the problem of multiple principals who want to obtain income from a privately informed agent and design their contracts non-cooperatively. Our analysis reveals that the degree of coordination between principals has strong implications for the shapes of contracts and the amount of...

Persistent link: https://www.econbiz.de/10010261310

Diversification and ownership concentration

Parigi, Bruno Maria; Pelizzon, Loriana - 2005

We consider a mean-variance general equilibrium economy where the expected returns for controlling and non-controlling shareholders are different because the former are able to divert a fraction of the profits. We find that when investor protection is poor, asset return correlation affects...

Persistent link: https://www.econbiz.de/10010261366

Construction contracts (or How to get the right building at the right price?)

Chakravarty, Surajeet; MacLeod, W. Bentley - 2006

Most contracts that individuals enter into are not written from scratch; rather, they depend upon forms and terms that have been successful in the past. In this paper, we study the structure of form construction contracts published by the American Institute of Architects (AIA). We show that...

Persistent link: https://www.econbiz.de/10010263907

How reasonable is the reasonable royalty rate?: Damage rules and probabilistic intellectual property rights

Choi, Jay Pil - 2006

This paper investigates how different damage rules in patent infringement cases shape competition when intellectual property rights are probabilistic. I develop a simple model of oligopolistic competition to compare two main liability doctrines that have been used in the US to assess...

Persistent link: https://www.econbiz.de/10010263961

The intergenerational transmission of risk and trust attitudes

Dohmen, Thomas; Falk, Armin; Huffman, David - 2008

Recent theoretical contributions depart from the usual practice of treating individual attitude endowments as a black box, by assuming that these are shaped by the attitudes of parents and other role models. Attitudes include fundamental preferences such as risk preference, and crucial beliefs...

Persistent link: https://www.econbiz.de/10010264365