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Optimal Inequality/Optimal Incentives : Evidence from a Tournament

Freeman, Richard B. - 2009

This paper examines performance in a tournament setting with different levels of inequality in rewards and different provision of information about individual's skill at the task prior to the tournament. We find that that total tournament output depends on inequality according to an inverse U...

Persistent link: https://www.econbiz.de/10012767237

A Litner Model of Payout and Managerial Rents

Lambrecht, Bart M. - 2010

We develop a dynamic agency model where payout, investment and financing decisions are made by managers who attempt to maximize the rents they take from the firm, subject to a capital market constraint. Managers smooth payout in order to smooth their flow of rents. Total payout (dividends plus...

Persistent link: https://www.econbiz.de/10013139901

Social Insurance, Information Revelation, and Lack of Commitment

Golosov, Mikhail - 2014

We study the optimal provision of insurance against unobservable idiosyncratic shocks in a setting in which a benevolent government cannot commit. A continuum of agents and the government play an infinitely repeated game. Actions of the government are constrained only by the threat of reverting...

Persistent link: https://www.econbiz.de/10013044626

Expectations with Endogenous Information Acquisition : An Experimental Investigation

Fuster, Andreas - 2018

Information frictions play an important role in many theories of expectation formation. We use a survey experiment to generate direct evidence on how people select, acquire and process information. Participants can buy different information signals that could help them forecast future national...

Persistent link: https://www.econbiz.de/10012915647

A Comparison of Tournaments and Contracts

Green, Jerry; Stokey, Nancy L. - 2021

Tournaments, reward structures based on rank order, are compared with individual contracts in a model with one risk-neutral principal and many risk-averse agents. Each agents' output is a stochastic function of his effort level plus an additive shock term that is common to all the agents. The...

Persistent link: https://www.econbiz.de/10013232756

Solomonic Separation : Risk Decisions as Productivity Indicators

Miller, Nolan - 2012

A principal provides budgets to agents (e.g., divisions of a firm or the principal's children) whose expenditures provide her benefits, either materially or because of altruism. Only agents know their potential to generate benefits. We prove that if the more "productive" agents are also more...

Persistent link: https://www.econbiz.de/10013096139

The Limits of Meritocracy : Screening Bureaucrats Under Imperfect Verifiability

Suárez Serrato, Juan Carlos - 2016

Does bureaucratic ability predict promotion in governments? We show that self-reported performance in enforcing the One Child Policy predicts mayoral promotion in China. However, misreporting handicaps screening—a non-manipulated performance measure does not predict promotion. We show that...

Persistent link: https://www.econbiz.de/10012999457

Optimal Contracting with Subjective Evaluation : The Effects of Timing, Malfeasance and Guile

MacLeod, W. Bentley - 2016

a way to integrate Williamson's (1975) notion of guile into agency theory. We find that designing sales contracts for …

Persistent link: https://www.econbiz.de/10012994910

Pay for Percentile

Barlevy, Gadi - 2011

We analyze an incentive pay scheme for educators that links educator compensation to the ranks of their students within appropriately defined comparison sets, and we show that under certain conditions this scheme induces teachers to allocate socially optimal levels of effort to all students....

Persistent link: https://www.econbiz.de/10013122652

On the Role of Group Size in Tournaments : Theory and Evidence from Lab and Field Experiments

List, John A. - 2014

. We begin with a theoretical exploration of optimal contest design, focusing on the number of competitors. Our theory … test of the theory implements a laboratory experiment, where important features of the theory can be exogenously imposed … models to inform us of the relevant theoretical predictions. In both cases we find that the theory has a fair amount of …

Persistent link: https://www.econbiz.de/10013056205