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Lenders condition future loans on some index of past performance. Typically, banks condition future loans on repayments of earlier obligations whilst international organizations (official lenders) condition future loans on the implementation of some policy action ('investment'). We build an...
Persistent link: https://www.econbiz.de/10013149943
The Great Recession, which was preceded by the financial crisis, resulted in higher unemployment and inequality. We propose a simple model where firms producing varieties face labor-market frictions and credit constraints. In the model, tighter credit leads to lower output, lower number of...
Persistent link: https://www.econbiz.de/10012987688
We estimate a structural model of borrowing and lending in the illegal money lending market using a unique panel survey of 1,090 borrowers taking out 11,032 loans from loan sharks. We use the model to evaluate the welfare effects of alternative law enforcement strategies. We find that a large...
Persistent link: https://www.econbiz.de/10013405845
A personal bankruptcy law that allows for a "fresh start" after bankruptcy reduces the individual risk involved in entrepreneurial activity. On the other hand, as risk shifts to creditors who recover less of their credit after a debtor's bankruptcy, lenders may charge higher interest rates or...
Persistent link: https://www.econbiz.de/10013130785
Many firms use subjective performance appraisal systems due to lack of objective performance measures. In these cases, supervisors usually have to rate the performance of their subordinates. Using such systems, it is a well established fact that many supervisors tend to assess the employees too...
Persistent link: https://www.econbiz.de/10013324841
and middle school teachers. Consistent with theory, high wage increases for promotion are associated with better …
Persistent link: https://www.econbiz.de/10012962307
that one and the same norm can be output-increasing, neutral, or output-decreasing depending on the incentive scheme. We …
Persistent link: https://www.econbiz.de/10013136669
Whereas economists have made extensive studies of the impact of levels of incentives on behavior, they have paid little attention to the effects of regularity and frequency of incentives. We contrasted three ways of rewarding participants in a real-effort experiment in which individuals had to...
Persistent link: https://www.econbiz.de/10013139506
We investigate the influence of two widespread compensation schemes, individual piece-rates and team incentives, on participants' inclination to lie, by adapting the experimental setup of Fischbacher and Heusi (2008). Lying turns out to be more pronounced under team incentives than under...
Persistent link: https://www.econbiz.de/10013120402
This paper studies how altruism between managers and employees affects relational incentive contracts. To this end we …
Persistent link: https://www.econbiz.de/10013082165