In this paper, we combine the strategic delegation approach of Fershtman-Judd-Sklivas with contets. The results show that besides a symmetric equilibrium there also exist asymmetric equilibria in which one owner induces pure sales maximization to his manager so that all the other firms drop out...

In an asymmetric tournament model with endogenous risk choice by the agents it is shown that equilibrium efforts decrease (increase) with risk if abilities are sufficiently similar (different). Risk also affects winning probabilities. The interaction of both effects is analyzed.

We discuss a principal-agent model in which the principal has the opportunity to include a non-compete agreement in the employment contract. We show that if the agent faces limited liability and there is an incentive problem the principal prefers not to impose such a clause if and only if the...

We discuss a principal-agent model in which the principal has the opportunity to include a non-compete agreement in the employment contract. We show that not imposing such an agreement can be beneficial for the principal as the possibility to leave the firm generates implicit incentives for the...

We discuss a principal-agent model in which the principal has the opportunity to include a non-compete agreement in the employment contract. We show that not imposing such an agreement can be beneficial for the principal as the possibility to leave the firm generates implicit incentives for the...

We study the determinants of biases in subjective performance evaluations in an MTurk experiment to test the implications of a standard formal framework of rational subjective evaluations. In the experiment, subjects in the role of workers work on a real effort task. Subjects in the role of...

This paper analyzes the role of works councils as gatekeepers safeguarding employee's interests in the adoption of monitoring practices. We first introduce a formal model predicting that (i) the introduction of monitoring practices leads to a stronger increase (or weaker decrease) in job...

It is often claimed that (i) managers work too hard on operational issues and do not spend enough effort on strategic activities and (ii) something can be done about this by introducing nonfinancial performance measures as for instance with a balanced scorecard. We give an explanation for both...

We investigate whether incentive schemes signal social norms and thus affect behavior beyond their direct economic consequences. A principal-agent experiment is studied in which prior to contract choice principals are informed about past actions of other agents and thus have more information...

We investigate how to strategically motivate sales agents in intermediary markets. In collaboration with a large travel company, we run a field experiment with more than 1, 200 independently owned intermediaries that sell our study firm's own products as well as products from competitors to end...