This is not the latest version of this item. The latest version can be found at: https://kops.uni-konstanz.de/handle/123456789/13484.2
Type of Publication: | Working Paper/Technical Report |
URI (citable link): | http://nbn-resolving.de/urn:nbn:de:bsz:352-134846 |
Author: | Englmaier, Florian; Leider, Stephen |
Year of publication: | 2008 |
Series: | CESifo working papers;2415 |
Summary: |
Empirically, compensation systems generate substantial effort despite weak monetary incentives. We consider reciprocal motivations as a source of incentives. We solve for the optimal contract in the basic principal-agent problem and show that reciprocal motivations and explicit performance-based pay are substitutes. A firm endogenously determines the mix of the two sources of incentives to best induce effort from the agent. Analyzing extended versions of the model allows us to examine how organizational structure impacts the effectiveness of reciprocity and to derive specific empirical predictions. We use the UKWERS workplace compensation data set to confirm the predictions of our extended model.
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JEL Classification: | D82 , J33 , M52 |
Subject (DDC): | 330 Economics |
Keywords: | optimal contracts, reciprocity, organizational structure |
Link to License: | In Copyright |
ENGLMAIER, Florian, Stephen LEIDER, 2008. Contractual and organizational structure with reciprocal agents
@techreport{Englmaier2008Contr-13484, series={CESifo working papers;2415}, title={Contractual and organizational structure with reciprocal agents}, year={2008}, author={Englmaier, Florian and Leider, Stephen} }
Englmaier_Contractural.pdf | 1663 |