Arbeitspapier
You Don't Always Get What You Pay For
Consider a principal-agent relationship in which more effort by the agent raises the likelihood of success. Does rewarding success, i.e., paying a bonus, increase effort in this case? I find that bonuses have not only an incentive but also an income effect. Overall, bonuses paid for success may well reduce effort and hence the probability of success. I also identify conditions under which the income effect dominates the incentive effect, and single out the hazard-rate of effort as a crucial determinant of this trade-off.
- Sprache
-
Englisch
- Erschienen in
-
Series: Discussion Paper Series ; No. 452
- Klassifikation
-
Wirtschaft
- Thema
-
bonus
premium
incentives
income effect
moral hazard
Leistungsentgelt
Leistungsanreiz
Prinzipal-Agent-Theorie
Moral Hazard
Einkommenseffekt
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Schnedler, Wendelin
- Ereignis
-
Veröffentlichung
- (wer)
-
University of Heidelberg, Department of Economics
- (wo)
-
Heidelberg
- (wann)
-
2007
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Schnedler, Wendelin
- University of Heidelberg, Department of Economics
Entstanden
- 2007
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