This paper studies the collaboration of talents in rank-order tournaments. We use a structural matching model with unobserved transfers among participants to capture the differentiated incentives of participants that spur collaboration, with a specific focus on incorporating incomplete...

This paper empirically studies the extent to which career concerns as part of a typical contract offer influence employees’ work performance in a Japanese auto dealership firm. Since career movements and base wage adjustments rely on performance evaluation over time, we develop a dynamic...

We investigate the economic determinants of contract structure and entry in an empirical setting with transfer contracts, which specify that manufacturers directly sell their products in retail stores while retailers collect the sales revenue and return a transfer to the manufacturers. Using a...

Most research linking compensation to strategy relies on agency theory economics and focuses on executive pay. We instead focus on the strategic compensation of non-executive employees, arguing that while agency theory provides a useful framework for analyzing compensation, it fails to consider...

This paper argues that conflicting incentives among managers may impede potential knowledge sharing benefits from vertical integration. I study knowledge-based agency costs from vertical integration in car leasing, where manufacturer-owned captive lessors compete with independent lessors. Both...

Behavioral economists have proposed that incentive contracts result in higher productivity when bonuses are “loss framed”—prepaid then clawed back if targets are unmet. We test this claim in a large-scale field experiment. Holding financial incentives fixed, we randomized the pre- or...