Male and female choices differ in many economic situations, e.g., on the labor market. This paper considers whether such differences are driven by different attitudes towards competition. In our experiment subjects choose between a tournament and a piecerate pay scheme before performing a real task. Men choose the tournament significantly more often than women. Women are mainly influenced by th...

ABSTRACT We study the profit effects and interplay of two core accounting practices in a field experiment large retail chain. In 2 × factorial design, we vary (1) whether store managers obtain decision-facilitating information on metric (2) they receive performance pay based same metric. find that both increase profits significantly. contrast to reasoning standard economic theory, do not comple...

Search frictions make worker turnover costly to firms. A three-month parental leave expansion in Sweden provides exogenous variation that we use quantify firms’ adjustment costs upon absence. The reform increased women’s duration and likelihood of separating from pre-birth employers. Firms with greater exposure the hired additional workers coworkers it coworkers’ hours, incurring wage correspon...

Previous studies have examined the manipulation of executive stock option awards and exercises, focusing on information timing by managers. In this paper, we investigate potential managerial manipulation of stock-price performance motivated by executive stock options. To distinguish performance manipulation from information timing, we examine stock-price performance surrounding the departure of...

This paper considers job separations in a search model with labour market matching and moral hazard. Both workers and firms value productive matches and take actions to increase match stability: firms offer a share of match surplus to provide workers with correct incentives and workers take hidden actions (effort) negatively affecting the match separation rate. Heterogeneous productivity draws ...

Social Comparisons of Wage Increases and Job Satisfaction* We combine status quo and social comparison considerations and investigate whether relative wage increases in the sense of differences between individual wage increases and wage increases of comparable employees are related to managers’ job satisfaction. Using a panel data set of managers in the German chemical industry, we indeed find ...

Performance Pay, Training and Labor Mobility Market imperfections may cause firms and workers to under-invest in specific training. This paper shows that profit sharing may be a suitable instrument to enhance specific training investments, either by enhancing wage flexibility or by increasing the returns to training. As a result, profit sharing not only increases productivity by means of an eff...

Economic theory suggests that agents care for the outcomes they produce. This paper studies the conditions under which a pro-social mission of a job affects workers’ motivation to perform well. In particular, we investigate whether it makes a difference if workers actively decide upon doing a mission-oriented job or are exogenously assigned. We find that a pro-social mission itself affects only...

We use a firm-CEO assignment framework to model the market for CEO effective labor. In the model’s equilibrium more talented CEOs match with and supply more effort to larger firms. Taxation of CEO incomes affects the equilibrium pricing of CEO effective labor and, hence, spills over and affects firm profits. Absent the ability to tax profits or a direct concern for firm owners, a standard presc...

Performance Pay and Risk Aversion A main prediction of agency theory is the well known risk-incentive trade-off. Incentive contracts should be found in environments with little uncertainty and for agents with low degrees of risk aversion. There is an ongoing debate in the literature about the first trade-off. Due to lack of data, there has so far been hardly any empirical evidence about the sec...