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Incentives, Reputation and the Allocation of Authority
Englmaier, Florian; Filipi, Ales; Singh, Ravi - Volkswirtschaftliche Fakultät, … - 2010
We address the question how much authority a principal should delegate to a manager with conflicting interests and uncertain ability in a context in which the manager has both compensationbased and reputational incentives. The optimal level of authority balances the value of the manager’s...
Persistent link: https://www.econbiz.de/10008581228
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Delegation and Rewards
Vetter, Stefan - Volkswirtschaftliche Fakultät, … - 2012
We study experimentally whether anti-corruption policies with a focus on bribery might be insufficient to uncover more subtle ways of gaining an unfair advantage. In particular, we investigate whether an implicit agreement to exchange favors between a decision-maker and a lobbying party serves...
Persistent link: https://www.econbiz.de/10010556731
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Bargaining and collusion in a regulatory relationship
Fiocco, Raffaele; Gilli, Mario - Volkswirtschaftliche Fakultät, … - 2014
setting, we explore the scope for collusion between the regulator and the firm, which results in the manipulation of the … regulator’s report on the firm’s costs to Congress. The firm’s bene.t of collusion arises from the higher price the … in collusion only if the regulator’s bargaining power in the regulatory relationship is relatively high. Then, we …
Persistent link: https://www.econbiz.de/10011140957
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Auctions vs. Negotiations:The Effects of Inefficient Renegotiation
Herweg, Fabian; Schmidt, Klaus M. - Volkswirtschaftliche Fakultät, … - 2014
For the procurement of complex goods the early exchange of information is important to avoid costly renegotiation ex post. We show that this is achieved by bilateral negotiations but not by auctions. Negotiations strictly outperforms auctions if sellers are likely to have superior information...
Persistent link: https://www.econbiz.de/10011093297
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Credence Goods, Costly Diagnosis, and Subjective Evaluation
Bester, Helmut; Dahm, Matthias - Volkswirtschaftliche Fakultät, … - 2014
We study contracting between a consumer and an expert. The expert can invest in diagnosis to obtain a noisy signal about whether a low–cost service is sufficient or whether a high–cost treatment is required to solve the consumer’s problem. This involves moral hazard because...
Persistent link: https://www.econbiz.de/10011140964
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Optimal Delegated Search with Adverse Selection and Moral Hazard
Ulbricht, Robert - Volkswirtschaftliche Fakultät, … - 2014
The paper studies a model of delegated search. The distribution of search revenues is unknown to the principal and has to be elicited from the agent in order to design the optimal search policy. At the same time, the search process is unobservable, requiring search to be self-enforcing. The two...
Persistent link: https://www.econbiz.de/10010775066
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Objective versus Subjective Performance Evaluations
Terstiege, Stefan - Volkswirtschaftliche Fakultät, … - 2013
Why does incentive pay often depend on subjective rather than objective performance evaluations? After all, subjective evaluations entail a credibility issue. While the most plausible explanation for this practice is lack of adequate objective measures, I argue that subjective evaluations might...
Persistent link: https://www.econbiz.de/10010700798
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Precontractual Investigation and Sequential Screening
Terstiege, Stefan - Volkswirtschaftliche Fakultät, … - 2013
Should contract design induce an agent to conduct a precontractual investigation even though, in any case, the agent will become fully informed after the signing of the contract? This paper shows that imperfect investigations might be encouraged. The result stands in contrast to previous...
Persistent link: https://www.econbiz.de/10010700800
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Allocation of Authority when a Person is not a Robot
Li, Jianpei; Wu, Yanhui - Volkswirtschaftliche Fakultät, … - 2007
, and the relationship between the resources. Monitoring is then introduced to fine tune value of delegation. …
Persistent link: https://www.econbiz.de/10005785789
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On Delegation under Relational Contracts
Gürtler, Oliver - Volkswirtschaftliche Fakultät, … - 2006
In this paper, a principal’s decision between delegating two tasks or handling one of the two tasks herself is analyzed. We assume that the principal uses both, formal contracts and informal agreements sustained by the value of future relationships (relational contracts) as incentive...
Persistent link: https://www.econbiz.de/10005785829