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The Generalized Informativeness Principle

Chaigneau, Pierre - 2014

This paper shows that the informativeness principle, as originally formulated by Holmstrom (1979), does not hold if the first-order approach is invalid. We introduce a "generalized informativeness principle" that takes into account non-local incentive constraints and holds generically, even...

Persistent link: https://www.econbiz.de/10013040535

Optimal Incentive Contracts in the Presence of Career Concerns : Theory and Evidence

Gibbons, Robert; Murphy, Kevin James - 2021

This paper studies career concerns -- concerns about the effects of current performance on future compensation -- and describes how optimal incentive contracts are affected when career concerns are taken into account. Career concerns arise frequently: they occur whenever the market uses a...

Persistent link: https://www.econbiz.de/10013228250

The Tenuous Tradeoff between Risk and Incentives

Prendergast, Canice - 2021

Empirical work testing for a negative tradeoff between risk and incentives, a cornerstone of agency theory, has not had …

Persistent link: https://www.econbiz.de/10013228971

Search and Work in Optimal Welfare Programs

Pavoni, Nicola - 2013

Some existing welfare programs ("work-first") require participants to work in exchange for benefits. Others ("job search-first") emphasize private job-search and provide assistance in finding and retaining a durable employment. This paper studies the optimal design of welfare programs when (i)...

Persistent link: https://www.econbiz.de/10013089023

Testing the Theory of Multitasking : Evidence from a Natural Field Experiment in Chinese Factories

Hong, Fuhai - 2013

tasks that produce unobservable outputs as they seek the salient rewards to observable outputs. Since the theory related to …

Persistent link: https://www.econbiz.de/10013072582

The Informativeness Principle Under Limited Liability

Chaigneau, Pierre - 2014

This paper shows that the informativeness principle does not automatically extend to settings with limited liability. Even if a signal is informative about effort, it may have no value for contracting. An agent with limited liability is paid zero for certain output realizations. Thus, even if...

Persistent link: https://www.econbiz.de/10013047777

Instrument-Based vs. Target-Based Rules

Halac, Marina - 2018

We develop a simple model to study rules based on instruments vs. targets. A principal faces a better informed but biased agent and relies on joint punishments as incentives. Instrument-based rules condition incentives on the agent's observable action; target-based rules condition incentives on...

Persistent link: https://www.econbiz.de/10012922207

Incentives in Hmos

Gaynor, Martin; Rebitzer, James B.; Taylor, Lowell J. - 2021

We study the effect of physician incentives in an HMO network. Physician incentives are controversial because they may induce doctors to make treatment decisions that differ from those they would chose in the absence of incentives. We set out a theoretical framework for assessing the degree to...

Persistent link: https://www.econbiz.de/10013233219

Incentives in Organizations

Gibbons, Robert - 2022

In this paper I summarize four new strands in agency theory that help me think about incentives in real organizations … organizations. I conclude by suggesting two avenues for further progress in agency theory: better integration with organizational …. As a point of departure, I being with a quick sketch of the classic agency model. I then discuss static models of …

Persistent link: https://www.econbiz.de/10013324001

Image Versus Information : Changing Societal Norms and Optimal Privacy

Ali, S. Nageeb - 2016

We analyze the costs and benefits of using social image to foster virtuous behavior. A Principal seeks to motivate reputation-conscious agents to supply a public good. Each agent chooses how much to contribute based on his own mix of public-spiritedness, private signal about the value of the...

Persistent link: https://www.econbiz.de/10012993235