Bonn Econ Discussion Papers
نویسنده
چکیده
In a multi-agent setting, individuals often compare own performance with that of their peers. These comparisons inuence agents incentives and lead to a noncooperative game, even if the agents have to complete independent tasks. I show that depending on the interplay of the peer e¤ects, agents e¤orts are either strategic complements or strategic substitutes. I solve for the optimal monetary incentives that complement the peer e¤ects and show that the principal prefers sequential e¤ort choices of the agents to choosing e¤orts simultaneously. Keywords: externalities; moral hazard; other-regarding preferences. JEL Classi cation: C72; D03; D86. Financial support by the Deutsche Forschungsgemeinschaft (DFG), grant SFB/TR 15 ("Governance and the E¢ciency of Economic Systems"), is gratefully acknowledged. Department of Economics, Institute for Applied Microeconomics, University of Bonn, Adenauerallee 24-42, D-53113 Bonn, Germany, e-mail: [email protected], phone: +49-228-739211.
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