Journal ArticleDOI
Learning, belief manipulation and optimal relationship termination
TLDR
In this paper, the authors study a dynamic agency problem in which a principal and an agent interact on a project repeatedly with the agent's ability initially unknown to both players, and they show that the principal can incentivize the agent by resorting to a combination of wage payments and relationship termination.About:
This article is published in Economics Letters.The article was published on 2020-05-01. It has received 0 citations till now. The article focuses on the topics: Agency cost & Principal (commercial law).read more
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Journal ArticleDOI
Managerial Incentive Problems: A Dynamic Perspective
TL;DR: In this paper, the authors studied how a person's concern for a future career may influence his or her incentives to put in effort or make decisions on the job, and showed that career motives can be beneficial as well as detrimental, depending on how well the two kinds of capital returns are aligned.
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Managerial Incentive Problems: A Dynamic Perspective
Bengt Holmstrom,Bengt Holmstrom +1 more
TL;DR: The authors studied how a person's concern for a future career may influence his or her incentives to put in effort or make decisions on the job, and found that career motives can be beneficial as well as detrimental, depending on how well the two kinds of capital returns are aligned.
Posted Content
Optimal incentive contracts in the presence of career concerns: theory and evidence
Robert Gibbons,Kevin Murphy +1 more
TL;DR: In this article, career concerns are taken into account, and the authors find that the explicit incentives from the optimal compensation contract should be strongest when a worker is close to retirement, because a longer prospective career increases the return to changing the market's belief.
ReportDOI
Optimal Incentive Contracts in the Presence of Career Concerns: Theory and Evidence
Robert Gibbons,Kevin Murphy +1 more
TL;DR: In this paper, the authors study optimal incentive contracts when workers have career concerns and find empirical support for this prediction in the relation between chief executive compensation and stock market performance, showing that the optimal compensation contract optimizes total incentives: the combination of the implicit incentives from career concern and the explicit incentives from the compensation contract.
Journal ArticleDOI
The dynamics of incentive contracts
Jean-Jacques Laffont,Jean Tirole +1 more
TL;DR: In this paper, a simple two-period principal/agent model is studied, where the principal updates the incentive scheme after observing the agent's first-period performance. But the agent has superior information about his ability, and the strategies are required to be perfect, and updating of the principal's beliefs about the agents ability follows Bayes' rule.