Showing 1 - 10 of 1,544
This paper extends the relational contract model in Levin (2003) with shocks to theagent’s cost of effort (agent’s type) to shocks to the principal’s valuation of the agent’seffort (principal’s type). When optimal effort is fully pooled across agent types...
Persistent link: https://www.econbiz.de/10011133036
This paper explores the implications of specific training for relational contracts.  A standard result for sustaining a relational contract is that the parties must jointly receive a surplus over what they can get by separating.  This has been interpreted as employees with relational contracts...
Persistent link: https://www.econbiz.de/10011071727
This paper has been superseded by paper No.221.
Persistent link: https://www.econbiz.de/10005047937
This paper investigates relational incentive contracts with a continuum of privately observedagent types that are persistent over time. For a sufficiently productive relationship,a pooling contract exists in which all agent types continuing the relationshipchoose the same action. Necessary and...
Persistent link: https://www.econbiz.de/10010701819
This paper considers why organizations use promotions, rather than just monetary bonuses, to motivate employees even though this may conflict with efficient assignment of employees to jobs. When performance is unverifiable, use of promotion reduces the incentive for managers to be affected by...
Persistent link: https://www.econbiz.de/10010604903
Workers will not pay for general on-the-job training if contracts are not enforceable. Firms may if there are mobility frictions. Private information about worker productivities, however, prevents workers who quit receiving their marginal products elsewhere. Their new employers then receive...
Persistent link: https://www.econbiz.de/10010605165
Risk-neutral individuals take more risky decisions when they have limited liability.  Risk-neutral managers may not when acting as agents under contract and taking costly actions to acquire informatin before taking decisions.  Limited liability makes it optimal to increase the reward for...
Persistent link: https://www.econbiz.de/10008459580
The Mortensen and Pissarides (1994) matching model with all wages negotiated each period is shown inconsistent with macroeconomic wage dynamics in the US. This applies even when heterogeneous match productivities, time to build vacancies and credible bargaining are incorporated. Wage rigidity...
Persistent link: https://www.econbiz.de/10011156466
This paper incorporates Nash bargaining, credible bargaining and efficiency wages as special cases of an over-arching model of wage determination in a matching model that is used to assess econometrically how well each fits US data. With Nash bargaining, estimates for worker bargaining power and...
Persistent link: https://www.econbiz.de/10011081547
This paper analyses principal-agent contracts when the risk-averse agent's action generates information that is not directly verifiable but is used to make a risky decision in a formulation more general than previously studied. It focuses on the impact on the decision made and the contract used,...
Persistent link: https://www.econbiz.de/10005046399