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Optimal Incentive Contracts For a Worker Who Envies His Boss

Dur, Robert; Glazer, Amihai - CESifo - 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/10005765867

Sustainable Social Spending in a Greying Economy with Stagnant Public Services : Baumol's Cost Disease Revisited

van der Ploeg, Rick - 2021

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/10013317376

Flexicurity, Wage Dynamics and Inequality Over the Life-Cycle

Bingley, Paul; Cappellari, Lorenzo; … - 2021

We investigate the relationship between life-cycle wages and flexicurity in Denmark. We separate permanent from transitory wages and characterise flexicurity using membership of unemployment insurance funds. We find that flexicurity is associated with lower wage growth heterogeneity over the...

Persistent link: https://www.econbiz.de/10013315978

It's the Media, Stupid - How Media Activity Shapes Public Spending

Bruns, Christian - 2008

Politicians seeking reelection need voters to know what they have done for them. Thus, incentives may arise to spend more money where media coverage is higher. We present a simple model to explain the allocation of public spending across jurisdictions contingent on media activity. An incumbent...

Persistent link: https://www.econbiz.de/10012768249

Exploring Higher-Order Risk Effects

Deck, Cary A. - 2008

Higher-order risk effects play an important role in examining economic behavior under uncertainty. A precautionary demand for saving has been linked to the property of prudence and the property of temperance has been used to show how the presence of an unavoidable risk affects one's behavior...

Persistent link: https://www.econbiz.de/10012768261

No-Trade in the Laboratory

Angrisani, Marco - 2013

We test the no-trade theorem in a laboratory financial market where subjects can trade an asset whose value is unknown. Subjects receive clues on the asset value and then set a bid and an ask at which they are willing to buy or to sell from the other participants. In treatments with no gains...

Persistent link: https://www.econbiz.de/10012753387

How Reasonable is the 'Reasonable' Royalty Rate? Damage Rules and Probabilistic Intellectual Property Rights

Choi, Jay Pil - 2021

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/10013317488

Differential Prize Taxation and Structural Discrimination in Contests

Mealem, Yosef - 2012

This paper evaluates differential prize taxation and structural discrimination as a means of increasing efforts in the most widely studied contests. We establish that a designer who maximizes efforts subject to a balanced-budget constraint prefers dual discrimination, namely, change of the...

Persistent link: https://www.econbiz.de/10013105142

American Idol: Should it be a Singing Contest or a Popularity Contest?

Amegashie, J. Atsu - CESifo - 2007

In the very popular FOX TV reality show, American Idol, the judges, who are presumably experts in evaluating singing effort, have no voting power when the field is narrowed to the top twenty-four contestants. It is only the votes of viewers that count. In the 2007 season of the show, one of the...

Persistent link: https://www.econbiz.de/10005406199

Teams and Tournaments in Relational Contracts

Kvaløy, Ola; Olsen, Trond - CESifo - 2014

We analyze relational contracts for a set of agents when either (a) only aggregate output or (b) individual outputs are observable. A team incentive scheme, where each agent is paid a bonus for aggregate output above a threshold, is optimal in case (a). The team’s efficiency may increase...

Persistent link: https://www.econbiz.de/10010765495