Format:
Online-Ressource, 44 p., text
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ill
Series Statement:
Discussion paper series / Forschungsinstitut zur Zukunft der Arbeit 1643
Content:
We analyze the Moral Hazard problem, assuming that agents are inequity averse. Our results differ from conventional contract theory and are more in line with empirical findings than standard results. We find: First, inequity aversion alters the structure of optimal contracts. Second, there is a strong tendency towards linear sharing rules. Third, it delivers a simple rationale for team based incentives in many environments. Fourth, the Sufficient Statistics Result is violated. Dependent on the environment, optimal contracts may be either overdetermined or incomplete. -- contract theory ; linear contracts ; incentives ; sufficient statistics result ; inequity aversion ; incomplete contracts
Note:
Title from PDF file as viewed on 7/26/2005
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Includes bibliographical references
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Also available in print
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System requirements: Adobe Acrobat Reader.
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Mode of access: World Wide Web.
Language:
English
Author information:
Wambach, Achim 1968-
Author information:
Englmaier, Florian 1974-
