Contractual and organizational structure with reciprocal agents

Englmaier, Florian und Leider, Stephen (2012): Contractual and organizational structure with reciprocal agents. In: American Economic Journal: Microeconomics, Bd. 4, Nr. 2: S. 146-183

Abstract

We solve for the optimal contract when agents are reciprocal, demonstrating that generous compensation can substitute for performance-based pay. Our results suggest several factors that make firms more likely to use reciprocal incentives. Reciprocity is most powerful when output is a poor signal of effort and when the agent is highly reciprocal and/or productive. Similarly, reciprocal incentives are attractive when firm managers have strong incentive pay and discretion over employee compensation. While reciprocal incentives can be optimal even when identical firms compete, a reciprocity contract is most likely when one firm has a match-specific productivity advantage with the agent. (JEL D23, D86, J33, M12, M52).

• Dokumententyp: Zeitschriftenartikel
• Publikationsform: Publisher's Version
• Fakultät: Volkswirtschaft ; Volkswirtschaft > Lehrstühle > Seminar für Organisationsökonomik
• Themengebiete: 300 Sozialwissenschaften > 330 Wirtschaft
• ISSN: 1945-7669
• Sprache: Englisch