relative to the agent's outside option. If the principal can impose a fine on the agent for leaving the firm, she will never …

the firm generates implicit incentives for the agent. The principal prefers to impose such a clause if and only if the …

the firm generates implicit incentives for the agent. The principal prefers to impose such a clause if and only if the …

the firm generates implicit incentives for the agent. The principal prefers to impose such a clause if and only if the …

the firm generates implicit incentives for the agent. The principal prefers to impose such a clause if and only if the …

relative to the agent's outside option. If the principal can impose a fine on the agent for leaving the firm, she will never …

the firm generates implicit incentives for the agent. The principal prefers to impose such a clause if and only if the … retaining the agent, she will never prefer a strict non-compete agreement. -- fine ; incentive ; incomplete contracts ; non …

the firm generates implicit incentives for the agent. The principal prefers to impose such a clause if and only if the …

We develop a theory of incentives, wages, and employment in the context of team production. A central insight is that … specialization and division of labor not only improve productivity but also increase eort and the sensitivity of eort to incentives … under moral hazard. We show that incentives and employment are complements for the principal when the positive eects of …

incentives and/or specialization. Second, incentives and employment are strategic substitutes. We show that the budget …-breaker offers incentives that are weaker than first best or equal-division partnership incentives, so that shirking is more … prevalent in the firm. Since incentives and team size are substitutes, the budget-breaker increases employment above the first …