Journal ArticleDOI
Relational contracts with and between agents
TLDR
In this paper, the authors study a dynamic multi-agent model with a verifiable team performance measure and non-verifiable individual measures and show that the optimal contract can be interpreted as an explicit contract that specifies a minimum bonus pool as a function of the verifiable measure and an implicit contract that gives the principal discretion to increase the size of the pool and to allocate it among the agents.About:
This article is published in Journal of Accounting and Economics.The article was published on 2016-04-01. It has received 39 citations till now. The article focuses on the topics: Implicit contract theory & Collusion.read more
Citations
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Assessing the performance of business unit managers
Jan Bouwens,L.A.G.M. van Lent +1 more
TL;DR: In this article, the authors investigate the use of various performance metrics in determining the periodic assessment, bonus decisions, and career paths of business unit managers, and show that the weight on accounting return measures is associated with the authority of these managers.
Book ChapterDOI
25. Relational Incentive Contracts
TL;DR: In this article, the authors present basic models with symmetric information to illustrate the fundamental issues and then consider specific investments, the role of legally enforceable contracts alongside relational contracts, private information, multiple suppliers, and issues of organization design.
Journal ArticleDOI
Accounting Manipulation, Peer Pressure, and Internal Control
Pingyang Gao,Gaoqing Zhang +1 more
TL;DR: In this article, the authors study firms' investment in internal control to reduce accounting manipulation and show the peer pressure for manipulation: one manager manipulates more if he suspects reports of peer firms are more likely to be manipulated.
Journal ArticleDOI
Relational contracts with subjective peer evaluations
TL;DR: In this paper, the authors study the optimal dynamic contracting for a firm with multiple workers where compensation is based on public performance signals and privately reported peer evaluations and show that if evaluation and effort provision are done by different workers (e.g., consider supervisor-agent hierarchy), first-best can be achieved even in a static setting.
Book
Discretion in Managerial Bonus Pools
TL;DR: In this article, the authors propose incentive contracts with multiple agents with a single agent and multiple periods of time, where the agent is assigned to a task and the task is to assign a task to each agent.
References
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Journal ArticleDOI
Production, Information Costs, and Economic Organization
Armen A. Alchian,Harold Demsetz +1 more
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Production, information costs, and economic organization
Armen A. Alchian,Harold Demsetz +1 more
TL;DR: In this paper, the authors present a set of reprint articles for which IEEE does not hold copyright. Full text is not available on IEEE Xplore for these articles, but full text can be found on the Internet Archive.
Journal ArticleDOI
Moral Hazard and Observability
TL;DR: In this article, the role of imperfect information in a principal-agent relationship subject to moral hazard is considered, and a necessary and sufficient condition for imperfect information to improve on contracts based on the payoff alone is derived.
Book
Pay without Performance: The Unfulfilled Promise of Executive Compensation
TL;DR: A detailed account of how structural flaws in corporate governance have enabled managers to influence their own pay and produced widespread distortions in pay arrangements is given in this paper. And the authors also examine how these flaws and distortions can best be addressed by making directors focus on shareholder interests and operate at arm's length from the executives whose compensation they set.
Journal ArticleDOI
Hierarchies and Bureaucracies: On the Role of Collusion in Organizations
TL;DR: In this article, the analysis of hierarchical structures does not boil down to a compounding of the basic inefficiency, due to the fact that going from the simple two-tier principal/agent structure to more complex ones introduces the possibility of asymmetric information and insurance motives (or limited liability constraints).