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For workers facing uncertain output, fixed-wage contracts provide implicit insurance compared to self-employment or performance-based pay. But like any insurance product, these contracts are prone to market distortions through moral hazard and adverse selection. Using a model of wage contracts...
Persistent link: https://www.econbiz.de/10015414158
adds a fixed payment per processed order to insure workers against earnings risk. Our experiment tests predictions from a … formal model on labor supply and performance for individuals with different degrees of risk aversion and intrinsic motivation …
Persistent link: https://www.econbiz.de/10012137977
interaction with monetary incentives. We find that motivational talk significantly improves performance only if it is accompanied …
Persistent link: https://www.econbiz.de/10009793159
In this paper we present results from a large scale real effort experiment in an online labor market investigating the effect of performance pay and two common leadership techniques: Positive expectations and specific goals. We find that positive expectations have a significant negative effect...
Persistent link: https://www.econbiz.de/10011977160
Inspired by a recent observation about an online retail company, this paper explains why a firm may find it optimal to offer an exit bonus to recent hires so as to induce self-selection. We study a double adverse selection problem, in which the principal can neither observe agents’ commitment...
Persistent link: https://www.econbiz.de/10011405134
Tournaments are often used to improve performance in innovation contexts. Tournaments provide monetary incentives but …,700 participants), we vary the salience of team identity, social-image concerns, and whether teams face monetary incentives. Increased … monetary incentives improve all teams’ outcomes without crowding out teams’ willingness to explore or perform similar tasks …
Persistent link: https://www.econbiz.de/10012597694
reduce the effort costs of a worker, and analyze the optimal combination of motivational effort and monetary incentives. We … conditions under which monetary incentives and motivational effort are substitutes or complements, and show that motivational …
Persistent link: https://www.econbiz.de/10010250173
In a tedious real effort task, subjects know that their piece rate is either low or ten times higher. When subjects are informed about their piece rate realization, they adapt their performance. One third of subjects nevertheless forego this instrumental information when given the choice - and...
Persistent link: https://www.econbiz.de/10011346303
weights in payout calculations, and contribute little to executive pay risk. Such ESG metrics with arguably weak incentive … incentives, are only found in sectors with a large environmental footprint. …
Persistent link: https://www.econbiz.de/10015077841
We analyze the optimal contract between a risk-averse manager and the initial shareholders in a two-period model where … second-period profit, so that it may be difficult to disentangle the incentives for these two types of effort. The contract …
Persistent link: https://www.econbiz.de/10011538964