منابع مشابه
Robust Incentive Contracts
We look at a principal–agent model in which the agent has to perform an action, the difficulty of which is better known ex interim than ex ante. We compare two contracting regimes; one with commitment to an ex ante negotiated contract, and one with an ex interim negotiated contract. The ex ante contract can not be too steep, but attempts to negotiate a steeper ex interim contract may result in ...
متن کاملEfficient Incentive Contracts
A so-called "incentive contract" is a linear payment schedule, where the buyer pays a fixed fee plus some proportion of audited project cost. That remaining proportion of project cost borne by the seller is called the "sharing ratio." A higher sharing ratio creates more incentive to reduce costs. But it also makes the agent bear more cost uncertainty, requiring as compensation a greater fixed f...
متن کاملIncentive contracts and unemployment
We study a labour market in which ...rms can observe workers’ output but not their e¤ort, and in which a worker’s productivity in a given ...rm depends on a worker-...rm speci...c component, unobservable for the ...rm. Firms o¤er wage contracts that optimally trade o¤ effort and wage costs. As a result, employed workers enjoy rents, which in turn create unemployment. We show that the incentive ...
متن کاملRevisiting Incentive-Based Contracts
Incentive-based pay is rational, intuitive, and popular. Agency theory tells us that a principal seeking to align its incentives with an agent's should be able to simply pay the agent to achieve the principal's desired results. Indeed, this strategy has long been used across diverse industries-from executive compensation to education, professional sports to public service-but with mixed results...
متن کاملCollective Agreements : Incentive Contracts
The paper considers collective agreements that are signed by a government agency and an industry which have an energy saving target. The target achievement is observable, but the energy saving actions undertaken by firms in the industry are not. We consider such agreements as firm contracts that depend on whether the industry complies with the target or not. We show that first best regulation c...
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: Journal of Institutional and Theoretical Economics
سال: 2004
ISSN: 0932-4569
DOI: 10.1628/0932456042776131