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Optimal Incentive Contracts For a Worker Who Envies His Boss
Dur, Robert; Glazer, Amihai - CESifo - 2004
. Such behavior may call for high-powered incentives, so that increased effort by the worker little increases the income of … his employer. This paper uses a principal-agent model to study optimal incentive contracts for envious workers under … various assumptions about the object and generality of envy. Envy amplifies the effect of incentives on effort and, therefore …
Persistent link: https://www.econbiz.de/10005765867
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Private Monitoring, Collusion and the Timing of Information
Khalil, Fahad; Lawarrée, Jacques; Scott, Troy J. - CESifo - 2013
When a principal’s monitoring information is private (non-verifiable), the agent should be concerned that the principal could misrepresent the information to reduce the agent’s wage or collect a monetary penalty. Restoring credibility may lead to an extreme waste of resources—the so-called...
Persistent link: https://www.econbiz.de/10011249563
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On the Optimality of Optimal Income Taxation
Bierbrauer, Felix - CESifo - 2010
The Mirrleesian model of income taxation restricts attention to simple allocation mechanism with no strategic interdependence, i.e., the optimal labor supply of any one individual does not depend on the labor supply of others. It has been argued by Piketty (1993) that this restriction is...
Persistent link: https://www.econbiz.de/10008671704
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Nonlinear Pricing and Exclusion: I. Buyer Opportunism
Choné, Philippe; Linnemer, Laurent - CESifo - 2014
We study the exclusionary properties of nonlinear price-quantity schedules in an Aghion-Bolton style model with elastic demand and product differentiation. We distinguish three regimes depending on whether and how the price of the incumbent good is linked to the quantity purchased from the rival...
Persistent link: https://www.econbiz.de/10010795341
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Nonlinear Pricing and Exclusion: II. Must-Stock Products
Choné, Philippe; Linnemer, Laurent - CESifo - 2014
We adapt the exclusion model of Choné and Linnemer (2014) to reflect the notion that dominant firms are unavoidable trading partners. In particular, we introduce the share of the buyer’s demand that can be addressed by the rival as a new dimension of uncertainty. Nonlinear price-quantity...
Persistent link: https://www.econbiz.de/10010795345
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Delegation and Dynamic Incentives
Shin, Dongsoo; Strausz, Roland - CESifo - 2014
incentives under limited commitment. It circumvents ratchet effects and facilitates the revelation of persistent private …
Persistent link: https://www.econbiz.de/10010764295
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Optimal Income Taxation with Asset Accumulation
Ábrahám, Árpád; Koehne, Sebastian; Pavoni, Nicola - CESifo - 2014
Several frictions restrict the government’s ability to tax assets. First, it is very costly to monitor trades on international asset markets. Second, agents can resort to nonobservable low-return assets such as cash, gold or foreign currencies if taxes on observable assets become too high....
Persistent link: https://www.econbiz.de/10011103398
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Delegation and Interim Performance Evaluation
Schütte, Miriam; Wichardt, Philipp Christoph - CESifo - 2013
This paper considers the effects of an interim performance evaluation on the decision of a principal to delegate authority to a potentially biased but better informed agent. Assuming the agents’ outside option to be determined by market beliefs about their type, interim evaluations (a) provide...
Persistent link: https://www.econbiz.de/10010639425
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Communicating Subjective Evaluations
Lang, Matthias - CESifo - 2014
Should principals explain and justify their evaluations? Suppose the principal’s evaluation is private information, but she can provide justification by sending a costly cheap-talk message. If she does not provide justification, her message space is restricted, but the message is costless. I...
Persistent link: https://www.econbiz.de/10010781550
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Employee Referral, Social Proximity and Worker Discipline: Theory and Evidence from India
Dhillon, Amrita; Iversen, Vegard; Torsvik, Gaute - CESifo - 2013
We study an important mechanism underlying employee referrals into informal low skilled jobs in developing countries. Employers can exploit social preferences between employee referees and potential workers to improve discipline. The profitability of using referrals increases with referee stakes...
Persistent link: https://www.econbiz.de/10010674452