0. Introduction Before a human being begins to make decisions and take unsupervised actions in a professional capacity which significantly affect others, s/he is usually explicitly empowered to do so, by means of some socially and/or legally sanctioned process of training and evaluation. At a time when it is being suggested that computational artifacts may take up roles with significant human i...

Following recent empirical evidence which indicates the importance of rank for the determination of workers’ wellbeing, this paper introduces status seeking preferences in the form of rank-dependent utility functions into a moral hazard framework with one firm and multiple workers, but no correlation in production. We show that workers’ concern for the rank of their wage in the firm’s wage dist...

Article history: Received 14 September 2010 Available online 22 August 2013 JEL classification: D86

Most computer professionals know that difficult ethical issues may arise in their work. We believe that these professionals want to “do the right thing.” They accept their responsibilities as moral agents and they recognize that their special technical skills give them power and responsibilities. However, the will to act ethically is not sufficient; computer professionals also need skills to ar...

We consider a principal-agent model with moral hazard where the agent’s knowledge about the performance measure is ambiguous and he is averse towards ambiguity. We show that the principal may optimally provide no incentives or contract only on a subset of all informative performance measures. That is, the Informativeness Principle does not hold in our model. These results stand in stark contras...