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Lang, Matthias - 2012 - this version: August 2013

evaluation to the agent if the evaluation turns out to be bad. The justification assures the agent that the principal has not … her evaluation. For good performance, however, the principal pays a constant high wage without justification. Furthermore …Should principals explain and justify their evaluations? In this paper the principal's evaluation is private …

Persistent link: https://www.econbiz.de/10009569527

A theory of threshold contracts

Becker, Johannes Gerd; Gersbach, Hans - 2013 - This version: August 2013

We consider an in nitely repeated reappointment game in a principal- agent relationship. Typical examples are voter-politician or government- public servant relationships. The agent chooses costly effort and enjoys being in office until he is deselected. The principal observes a noisy signal of...

Persistent link: https://www.econbiz.de/10010221102

Contracts that Reward Innovation : Delegated Experimentation with an Informed Principal

Sun, Yiman - 2018

uncertain about which contract will be implemented, can increase the payoff of the high type principal to approximate her full …

Persistent link: https://www.econbiz.de/10012932065

A Theory of Threshold Contracts

Becker, Johannes Gerd; Gersbach, Hans - 2013

We consider an infinitely repeated reappointment game in a principal-agent relationship. Typical examples are voter-politician or government-public servant relationships. The agent chooses costly effort and enjoys being in office until he is deselected. The principal observes a noisy signal of...

Persistent link: https://www.econbiz.de/10014152779

Dynamic contracts when agent's quality is unknown

Prat, Julien; Jovanovic, Boyan - In: Theoretical economics : TE ; an open access journal in … 9 (2014) 3, pp. 865-914

We solve a long-term contracting problem with symmetric uncertainty about the agent's quality, and a hidden action of the agent. As information about quality accumulates, incentives become easier to provide because the agent has less room to manipulate the principal's beliefs. This result is...

Persistent link: https://www.econbiz.de/10011674079

Strategic incomplete contracts : theory and experiments

Erkal, Nisvan; Wu, Steven Y.; Roe, Brian - 2014

We develop a model of strategic contractual incompleteness that identifies conditions under which principals might omit even costlessly verifiable terms. We then use experiments to test comparative statics predictions of the model. While it is well known that verifiability imperfections can...

Persistent link: https://www.econbiz.de/10010457849

Gift-exchange, incentives, and heterogeneous workers

Non, Jan Adrianus - 2011

that the principal cares for them. Principals can signal their altruism by offering a generous contract, consisting of a … agents do not reciprocate the principal's altruism, the principal may find it optimal to write a contract that simultaneously … signals his altruism and screens reciprocal worker types. I show that such a contract is characterised by excessively strong …

Persistent link: https://www.econbiz.de/10011379625

Optimal contracts with a risk-taking agent

Barron, Daniel; Georgiadis, George; Swinkels, Jeroen M. - In: Theoretical economics : TE ; an open access journal in … 15 (2020) 2, pp. 715-761

optimally offers a contract that makes the agent's utility concave in output. If the agent is risk-neutral and protected by … concavity constraint might bind for some outputs but not others. We characterize the unique profit-maximizing contract and show …

Persistent link: https://www.econbiz.de/10012308620

Observable strategies, commitments, and contracts

Wärneryd, Karl Erik - 2014

We consider rules (strategies, commitments, contracts, or computer programs) that make behavior contingent on an opponent's rule. The set of perfectly observable rules is not well defined. Previous contributions avoid this problem by restricting the rules deemed admissible. We instead limit the...

Persistent link: https://www.econbiz.de/10010437999

Incentive design and mis-allocated effort : conference paper

Schnedler, Wendelin - 2013 - Preliminary version

Incentives often distort behavior: they induce agents to exert effort but this effort is not employed optimally. This paper proposes a theory of incentive design allowing for such distorted behavior. At the heart of the theory is a trade-off between getting the agent to exert effort and ensuring...

Persistent link: https://www.econbiz.de/10010344596