Similar Search Results

Second-Degree Moral Hazard in a Real-World Credence Goods Market

Balafoutas, Loukas - 2014

Empirical literature on moral hazard focuses exclusively on the direct impact of asymmetric information on market outcomes, thus ignoring possible repercussions. We present a field experiment in which we consider a phenomenon that we call second-degree moral hazard – the tendency of the supply...

Persistent link: https://www.econbiz.de/10013061956

Exploitation Aversion : When Financial Incentives Fail to Motivate Agents

Carpenter, Jeffrey P. - 2013

rewards to performance increases effort, but that they can also backfire, reducing effort. Intrinsic motivation, the internal …. If the incentives crowd-out intrinsic motivation, and the effect is large enough, the net motivational effect on effort …, is one facet of intrinsic motivation, triggered by the combination of high-powered incentives and egoistic principal …

Persistent link: https://www.econbiz.de/10013078830

Wage-Hours Contracts, Overtime Working and Premium Pay

Hart, Robert A.; Ma, Yui - 2021

This paper offers a contract-based theory to explain the determination of standard hours, overtime hours and overtime premium pay. We expand on the wage contract literature that emphasises the role of firm-specific human capital and that explores problems of contract efficiency in the face of...

Persistent link: https://www.econbiz.de/10013324874

Contracts as Reference Points : Experimental Evidence

Fehr, Ernst - 2009

In a recent paper, Hart and Moore (2008) introduce new behavioral assumptions that can explain long term contracts and important aspects of the employment relation. However, so far there exists no direct evidence that supports these assumptions and, in particular, Hart and Moore's notion that...

Persistent link: https://www.econbiz.de/10012765614

Dynamic Incentive Contracts Under Parameter Uncertainty

Prat, Julien - 2010

We analyze a long-term contracting problem involving common uncertainty about a parameter capturing the productivity of the relationship, and featuring a hidden action for the agent. We develop an approach that works for any utility function when the parameter and noise are normally distributed...

Persistent link: https://www.econbiz.de/10013135822

Dynamic Contracts and Learning by Doing

Prat, Julien - 2014

This paper studies the design of optimal contracts in dynamic environments where agents learn by doing. We derive a condition under which contracts are fully incentive compatible. A closed-form solution is obtained when agents have CARA utility. It shows that human capital accumulation...

Persistent link: https://www.econbiz.de/10013058309

Incentivizing Learning-by-Doing : The Role of Compensation Schemes

Graff Zivin, Joshua - 2019

In this paper, we examine the impact of pay-for-performance incentives on learning-by-doing. We exploit personnel data on fruit pickers paid under two distinct compensation contracts: a standard piece rate plan and a piece rate plan with an extra one-time bonus tied to output. Under the bonus...

Persistent link: https://www.econbiz.de/10012870161

The Response to Dynamic Incentives in Insurance Contracts with a Deductible : Evidence from a Differences-in-Regression-Discontinuities Design

Klein, Tobias J. - 2020

We develop a new approach to quantify how patients respond to dynamic incentives in health insurance contracts with a deductible. Our approach exploits two sources of variation in a differences-in-regression-discontinuities design: deductible contracts reset at the beginning of the year, and...

Persistent link: https://www.econbiz.de/10012837905

Risk, Delegation, and Project Scope

Roider, Andreas - 2021

This paper studies a partial-contracting model where an agent may provide effort to increase a project's scope before some later decisions have to be taken. Consistent with existing empirical evidence, we find a positive relationship between exogenous risk and delegation. That is, we show that...

Persistent link: https://www.econbiz.de/10013316757

Performance Pay, Sorting, and Outsourcing

Henneberger, Fred - 2009

Implementing performance pay requires that workers' output be measured. When measurement costs differ among firms, those with a measurement cost advantage choose to implement performance pay. They attract the best workers, and both the level and variability of compensation are higher at these...

Persistent link: https://www.econbiz.de/10012767005