Incentive Schemes, Private Information and the Double-Edged Role of Competition for Agents


Book Description

This paper examines the effect of imperfect labor market competition on the efficiency of compensation schemes in a setting with moral hazard and risk-averse agents, who have private information on their productivity. Two vertically differentiated firms compete for agents by offering contracts with fixed and variable payments. The superior firm employs both agent types in equilibrium, but the competitive pressure exerted by the inferior firm has a strong impact on contract design: For high degrees of vertical differentiation, i.e. low competition, low-ability agents are under-incentivized and exert too little effort. For high degrees of competition, high-ability agents are over-incentivized and bear too much risk. For a range of intermediate degrees of competition, however, agents' private information has no impact and both contracts are second-best. Interim efficiency of the least-cost separating allocation in the inferior firm is a sufficient condition for equilibrium existence. If this is violated, there can only be equilibria where the inferior firm "overbids", i.e. where it would not break even when attracting both agent types. Adding horizontal differentiation allows for pure-strategy equilibria even when there would be no equilibrium without overbidding in the pure vertical model, but equilibria with overbidding fail to exist.




Honours versus Money


Book Description

Honours fulfil one of the most fundamental desires of human beings, namely, to be recognised and held in esteem by others. There are thousands of awards in all areas of society: the state, arts and media, sports, religion, the voluntary sector, academia, and business. Awards are well visible, can raise the recipients' intrinsic motivation and creativity, and establish a bond of loyalty to the giver. They have distinct advantages over money and other rewards. Presenting empirical evidence using modern statistical techniques Honours versus Money argues that awards can significantly raise performance in different contexts even if they are purely symbolic, recommending how this can be used in practice. It makes the case for reorienting our focus- away from the monetary or material dimensions of work and private life, and towards the symbolic dimensions to celebrate and shine a light on merit and achievement. Honours versus Money discusses award bestowals in their different forms and facets, including as signals and as components of organisations' human resource strategies. It opens our perspective for motivational strategies beyond money, while also outlining their potential pitfalls.







The Principal Agent Model


Book Description

The economics of asymmetric information has been the most important new tool of economic analysis and has proved powerful in explaining many aspects of the functioning of the economy. This anthology brings together every major paper in the field.




Corporate Social Responsibility and Corporate Change


Book Description

This wide-ranging book examines the new dynamics of corporate social responsibility (CSR) and the impact they have had on the transformation of business corporations. Written by an international group of distinguished experts in management and organization studies, economics and sociology, the book leads one to theoretically and practically rethink CSR, a movement that has developed into a strong and rich institutional domain since the mid 1990s. Through 14 chapters, the book shows the complexity, diversity and progression of the institutional work performed by a large number of individual and organizational actors in specialized networks to develop this strategic field. Central to this book are: the core issues associated with the field of CSR; recent advances in the development, dissemination and implementation of public and private standards of social responsibility; the pressing challenges of developing sustainable strategies of value creation in the face of global warming and underdevelopment; and finally, examples of how CSR has been implemented and institutionalized within business organizations with special attention to the role played by a variety of social actors in organizational change. Conceived as a movement, corporate social responsibility spearheads a transformation project challenging traditional and outmoded forms of corporate governance that frequently pose troublesome ethical issues. From this standpoint, Corporate Social Responsibility and Corporate Change will serve as a reference point for academics, researchers, managers and practitioners.




The Economics of Imperfect Markets


Book Description

This book is a collection of eleven papers concerned with the effects of market imperfections on the decision-making of economic agents and on economic policies that try to correct the inefficient market outcomes due to those imperfections. As a consequence, real and financial imperfections are related : economic decisions are simultaneously affected by imperfections present both in real and financial markets. Notwithstanding the obvious fact that market interdependence is not novel, scholar interests are typically concentrated on the specific relationship among economic decisions originating from particular imperfections. This explains why, in the case of perfect financial markets, we can speak of "the" us.




Minutes of Evidence ...


Book Description




The Economics of Risk and Time


Book Description

Updates and advances the theory of expected utility as applied to risk analysis and financial decision making.




Parliamentary Papers


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Bombay


Book Description