Arbeitspapier
Performance pay and risk aversion
A main prediction of agency theory is the well known risk-incentive trade-off. Incentive contracts should be found in environments with little uncertainty and for agents with low degrees of risk aversion. There is an ongoing debate in the literature about the first trade-off. Due to lack of data, there has so far been hardly any empirical evidence about the second. Making use of a unique representative data set, we find clear evidence that risk aversion has a highly significant and substantial negative impact on the probability that an employee's pay is performance contingent.
- Language
-
Englisch
- Bibliographic citation
-
Series: IZA Discussion Papers ; No. 2012
- Classification
-
Wirtschaft
Compensation Packages; Payment Methods
Personnel Economics: Compensation and Compensation Methods and Their Effects
Information, Knowledge, and Uncertainty: General
- Subject
-
risk
incentives
agency theory
risk aversion
performance appraisal
pay for performance
GSOEP
- Event
-
Geistige Schöpfung
- (who)
-
Grund, Christian
Sliwka, Dirk
- Event
-
Veröffentlichung
- (who)
-
Institute for the Study of Labor (IZA)
- (where)
-
Bonn
- (when)
-
2006
- Handle
- Last update
-
10.03.2025, 11:45 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
- Grund, Christian
- Sliwka, Dirk
- Institute for the Study of Labor (IZA)
Time of origin
- 2006
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