This paper analyzes the optimal contract for a consumer to procure a credence good from an expert when (i) the expert might misrepresent his private information about the consumer's need, (ii) the expert might not choose the requested service since his choice of treatment is non-observable, and...

We study information flows in an organization with a top management (principal) and multiple subunits (agents) with private information that determines the organization's aggregate efficiency. Under centralization, eliciting the agents' private information may induce the principal to manipulate...

We study an agency model with vertical hierarchy - the principal, the prime-agent and the sub-agent. The principal faces a project that needs both agents' services. Due to costly communication, the principal receives a report only from the prime-agent, who receives a report from the sub-agent....

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...

Wir analysieren das Gesetz zur Angemessenheit der Vorstandsvergütung. Ferner arbeiten wir einige aufgrund wirtschaftswissenschaftlicher Überlegungen zu erwartende Probleme heraus und prognostizieren mögliche ökonomische Auswirkungen des Gesetzes. Des Weiteren gehen wir im Rahmen einer...

Although relative performance schemes are pervasive in organizations reliable empirical dataon induced sabotage behavior is almost non-existent. We study sabotage in tournaments in acontrolled laboratory experiment and are able to confirm one of the key insights from theory:effort and sabotage...

Subjective evaluations are widely used, but call for different contracts from classical moral-hazard settings. Previous literature shows that contracts require payments to third parties. I show that the (implicit) assumption of deterministic contracts makes payments to third parties necessary....

This paper investigates whether limited liability affects risk-taking through motivated beliefs. To do so, we run a within-subject experiment in which subjects invest in a risky asset under full or limited liability. In both cases, before the investment is made, subjects observe a noisy signal...

Even though decision-making in small teams is pervasive in business and in private life, littleis known about subjects’ preferences with respect to individual and team decision-making andabout the consequences of respecting these preferences. We report the results from anexperimental...

The positive role of transformational leadership on productivity and mental wellbeing has long been established. Transformational leadership behavior may be particularly suited to navigate times of crisis which are characterized by high levels of complexity and uncertainty. We exploit...