Do Employees Profit from Profit Sharing? Evidence from Canadian Panel Data Using panel data from a large sample of Canadian establishments, this paper examines whether employee earnings increase, decrease, or do not change in the period subsequent to adoption of profit sharing, relative to establishments that do not adopt profit sharing. Our research contributes to knowledge by utilizing longit...

This paper studies the intertemporal allocation of incentives in a repeated moral hazard model with reference-dependent preferences as in Kőszegi and Rabin (2009). Besides consumption utility, the agent experiences utility from the change in his beliefs about present and future effort and income. When effort plans are rational, the prospect of being disappointed by the outcome realization equal...

This paper examines the empirical relationship between board structure, CEO compensation and firm performance in the context of an emerging economy, India. Using panel data on 462 manufacturing firms from the Indian corporate sector for the period 1997 to 2002 I would like to explore two specific issues. First, I have examined how the structure of the corporate board in terms of size and propor...

Executive Compensation, Firm Performance, and Chaebols in Korea: Evidence from New Panel Data This paper provides the first rigorous econometric estimates on the pay-performance relations for executives of Korean firms with and without Chaebol affiliation. To do so, we have assembled for the first time panel data (that provide information not only on executive compensation and firm performance ...

It is widely observed that many physicians working in public health facilities do not put in the required effort and/or time in their jobs. At the same time, many public physicians remain highly motivated, working long hours for little financial reward in providing quality health services. This mix of providertypes poses fundamental challenges in the design of compensation mechanisms and monito...

This paper studies incentives in a dynamic contracting framework of a levered firm. In particular, the manager selects long-term and short-term efforts, while shareholders choose initially optimal leverage and ex-post optimal default policies. There are three results. First, shareholders trade off the benefits of short-termism (current cash flows) against the benefits of higher growth from long...

Bank payouts divert cash to shareholders, while leaving behind riskier and less liquid assets to repay debt holders in the future. Bank payouts, therefore, constitute a type of risk-shifting that benefits equity holders at the expense of debt holders. In this paper, we provide insights on how incentives stemming from inside debt impact bank payout policy in a manner that protects debt holder in...

This paper documents the extent of union coverage and performance-related pay (PRP) – the latter representing one aspect of pay flexibility across standard and non-standard workers in Britain, using the first seven waves of the British Household Panel Survey, 1991-1997. We find there is no evidence of expansion of either union coverage or PRP towards any type of non-standard employment in the 1...

This paper studies a particular kind of gaming responses to explicit incentives in a large government organization. The gaming responses we consider occur when agents strategically report their performance outcomes to maximize their awards. An important contribution of this work is to examine whether this behavior diverts resources (e.g. agents’ time) from productive activities or whether it si...

In this paper a tournament between teams (a collective tournament) is analyzed, where each contestant may spend productive e¤ort in order to increase his team’s performance or sabotage the members of the opponent team. It is shown that sabotaging the weaker members of a team always decreases their team’s performance more signi…cantly than sabotaging stronger members does. As a consequence, sabo...