Arbeitspapier
Dynamic Bonus Pools
We analyze a two-period agency problem with limited liability and nonverifiable information. The principal commits to a dynamic bonus pool comprising a fixed total payment that may be distributed over time to the agent and a third party. We find that the optimal two-period contract features memory. If the agent succeeds in the first-period, second-period incentives are weakened whereas higher-powered incentives are provided if he fails. The two-period bonus pool offers a complementary reason for why third-party payments are not commonly observed in practice.
- Language
-
Englisch
- Bibliographic citation
-
Series: SFB/TR 15 Discussion Paper ; No. 443
- Classification
-
Wirtschaft
- Event
-
Geistige Schöpfung
- (who)
-
Budde, Jörg
Hofmann, Christian
- Event
-
Veröffentlichung
- (who)
-
Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
- (where)
-
München
- (when)
-
2011
- DOI
-
doi:10.5282/ubm/epub.17406
- Handle
- URN
-
urn:nbn:de:bvb:19-epub-17406-5
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Budde, Jörg
- Hofmann, Christian
- Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
Time of origin
- 2011
Other Objects (12)
Bonus Pools, Limited Liability, and Tournaments
Bonus Pools and the Informativeness Principle
Bankers' compensation: Sprint swimming in short bonus pools?
Dynamic prediction pools: An investigation of financial frictions and forecasting performance
To Pool or not to Pool: Revisited
Optimal Prediction Pools
The Bonus-Income Donation Norm
Attention-driven demand for bonus contracts
Bonus payments and reference point violations
Bonus oder Bias? Mechanismen geschlechtsspezifischer Entlohnung
Attention-driven demand for bonus contracts
Optimal liquidation in dark pools
Bonus Pools, Limited Liability, and Tournaments
Bonus Pools and the Informativeness Principle
Bankers' compensation: Sprint swimming in short bonus pools?
Dynamic prediction pools: An investigation of financial frictions and forecasting performance
To Pool or not to Pool: Revisited
Optimal Prediction Pools
The Bonus-Income Donation Norm
Attention-driven demand for bonus contracts
Bonus payments and reference point violations
Bonus oder Bias? Mechanismen geschlechtsspezifischer Entlohnung
Attention-driven demand for bonus contracts
Optimal liquidation in dark pools
Bonus Pools, Limited Liability, and Tournaments
Bonus Pools and the Informativeness Principle
Bankers' compensation: Sprint swimming in short bonus pools?
Dynamic prediction pools: An investigation of financial frictions and forecasting performance
To Pool or not to Pool: Revisited
Optimal Prediction Pools
The Bonus-Income Donation Norm
Attention-driven demand for bonus contracts
Bonus payments and reference point violations
Bonus oder Bias? Mechanismen geschlechtsspezifischer Entlohnung
Attention-driven demand for bonus contracts