Optimal incentive contracts under inequity aversion

Englmaier, Florian; Wambach, Achim

doi:10.1016/j.geb.2009.12.007

Optimal incentive contracts under inequity aversion

Publikationstyp:	Zeitschriftenartikel
URI (zitierfähiger Link):	http://nbn-resolving.de/urn:nbn:de:bsz:352-127126
Autor/innen:	Englmaier, Florian; Wambach, Achim
Erscheinungsjahr:	2010
Erschienen in:	Games and Economic Behavior ; 69 (2010), 2. - S. 312-328. - ISSN 0899-8256
DOI (zitierfähiger Link):	https://dx.doi.org/10.1016/j.geb.2009.12.007
Zusammenfassung:	We analyze the classic moral hazard problem with the additional assumption that agents are inequity averse. The presence of inequity aversion alters the structure of optimal contracts. When the concern for equity becomes more important, there is convergence towards linear sharing rules. The sufficient statistics result is violated. Depending on the environment, contracts may be either overdetermined, i.e. include non-informative performance measures, or incomplete, i.e. neglect informative performance measures. Finally, our model delivers a simple rationale for team based incentives, implying wage compression.
Fachgebiet (DDC):	330 Wirtschaft
Schlagwörter:	Contract theory, linear contracts, incentives, sufficient statistics result, inequity aversion, incomplete contracts
Link zur Lizenz:	Nutzungsbedingungen

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ENGLMAIER, Florian, Achim WAMBACH, 2010. Optimal incentive contracts under inequity aversion. In: Games and Economic Behavior. 69(2), pp. 312-328. ISSN 0899-8256. Available under: doi: 10.1016/j.geb.2009.12.007

@article{Englmaier2010Optim-12712, title={Optimal incentive contracts under inequity aversion}, year={2010}, doi={10.1016/j.geb.2009.12.007}, number={2}, volume={69}, issn={0899-8256}, journal={Games and Economic Behavior}, pages={312--328}, author={Englmaier, Florian and Wambach, Achim} }

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