Utilizad este identificador para citar o enlazar este documento: http://hdl.handle.net/2072/4055

Market Competition and Lower Tier Incentives
Theilen, Bernd
Universitat Rovira i Virgili. Departament d'Economia
The relationship between competition and performance-related pay has been analysed in single-principal-single-agent models. While this approach yields good predictions for managerial pay schemes, the predictions fail to apply for employees at lower tiers of a firm's hierarchy. In this paper, a principal-multi-agent model of incentive pay is developed which makes it possible to analyze the effect of changes in the competitiveness of markets on lower tier incentive payment schemes. The results explain why the payment schemes of agents located at low and mid tiers are less sensitive to changes in competition when aggregated firm data is used. JEL classification numbers: D82, J21, L13, L22. Keywords: Cournot competition, Contract delegation, Moral hazard, Entry, Market size, Wage cost.
2007
Cournot competition
Contract delegation
Moral hazard
Entry
Market size
Wage cost
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Artículo
1988 - 0812
Documents de treball del Departament d'Economia;2007-01;
         

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