Optimal Incentive Contract for Sales Team with Loss Aversion Preference
نویسندگان
چکیده
منابع مشابه
Incentive Design under Loss Aversion
Compensation schemes often reward success but do not penalize failure. Fixed salaries with stock options or bonuses have this feature. Yet the standard principal–agent model implies that pay is normally monotonically increasing in performance. This paper shows that, under loss aversion, there will be intervals over which pay is insensitive to performance, with the use of carrots but not sticks ...
متن کاملOptimal Incentive Contract with Endogenous Monitoring Technology
Recent technology advances give firms more flexibility to utilize employee performance data at a reduced and yet significant cost. This paper develops a theory of optimal incentive contracting where the monitoring technology that governs the above described procedure is part of the designer’s strategic planning. In otherwise standard principal-agent models with moral hazard, we assume that the ...
متن کاملLoss Aversion , Price Stability , and Sales ∗
A large body of experimental evidence suggests that people are loss averse. Inspired by this evidence, we develop a model in which a monopolist sells to loss averse, yet rational, consumers. We first introduce (portable) techniques for analyzing the demand of such consumers, and then investigate the monopolist's pricing strategy. In contrast to the standard monopoly model, we find that in relat...
متن کاملOptimal incentive contracts under inequity aversion
Optimal Incentive Contracts under Inequity Aversion We analyze the Moral Hazard problem, assuming that agents are inequity averse. Our results differ from conventional contract theory and are more in line with empirical findings than standard results. We find: First, inequity aversion alters the structure of optimal contracts. Second, there is a strong tendency towards linear sharing rules. Thi...
متن کاملOptimal Incentive Contract with Costly and Flexible Monitoring
Recent advances in IT and big data enable firms to adopt an increasing variety of monitoring technologies at a reduced and yet significant cost. We examine the effect of such cost and flexibility on employee productivity and the internal organization of firms. In an otherwise standard principal-agent model with moral hazard, we allow the principal to adopt any monitoring technology that constit...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: Symmetry
سال: 2019
ISSN: 2073-8994
DOI: 10.3390/sym11070864