Arbeitspapier
Optimal Incentives without Expected Utility
This paper investigates the optimal design of incentives when agents distort probabilities. We show that the type of probability distortion displayed by the agent and its degree determine whether an incentivecompatible contract can be implemented, the strength of the incentives included in the optimal contract, and the location of incentives on the output space. Our framework demonstrates that incorporating descriptively-valid theories of risk in a principal-agent setting leads to incentive contracts that are typically observed in practice such as salaries, lump-sum bonuses, and high-performance commissions.
- Sprache
-
Englisch
- Erschienen in
-
Series: Tinbergen Institute Discussion Paper ; No. TI 2022-090/I
- Klassifikation
-
Wirtschaft
Asymmetric and Private Information; Mechanism Design
Economics of Contract: Theory
Labor Contracts
Personnel Economics: Compensation and Compensation Methods and Their Effects
Personnel Management; Executives; Executive Compensation
- Thema
-
Contracts
Probability Weighting
Incentives
Mechanism Design
Rank-Dependent Utility.
- Ereignis
-
Geistige Schöpfung
- (wer)
-
González-Jiménez, Víctor
- Ereignis
-
Veröffentlichung
- (wer)
-
Tinbergen Institute
- (wo)
-
Amsterdam and Rotterdam
- (wann)
-
2022
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 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
- González-Jiménez, Víctor
- Tinbergen Institute
Entstanden
- 2022
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