Optimal incentive contracts under inequity aversion

被引:126
作者
Englmaier, Florian [1 ]
Wambach, Achim [2 ]
机构
[1] Univ Munich, D-80539 Munich, Germany
[2] Univ Cologne, D-50923 Cologne, Germany
关键词
Contract theory; Linear contracts; Incentives; Sufficient statistics result; Inequity aversion; Incomplete contracts; MORAL HAZARD; SOCIAL PREFERENCES; 1ST-ORDER APPROACH; PAY; RECIPROCITY; COMPETITION; FAIRNESS; EQUITY; WAGES;
D O I
10.1016/j.geb.2009.12.007
中图分类号
F [经济];
学科分类号
02 ;
摘要
We analyze the classic moral hazard problem with the additional assumption that agents are inequity averse. The presence of inequity aversion alters the structure of optimal contracts. When the concern for equity becomes more important, there is convergence towards linear sharing rules. The sufficient statistics result is violated. Depending on the environment, contracts may be either overdetermined, i.e. include non-informative performance measures, or incomplete, i.e. neglect informative performance measures. Finally, our model delivers a simple rationale for team based incentives, implying wage compression. (C) 2010 Elsevier Inc. All rights reserved.
引用
收藏
页码:312 / 328
页数:17
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