Optimal incentive contracts under inequity aversion

• 成果类型: Article
• 署名作者: Englmaier, Florian; Wambach, Achim
• 署名单位: University of Munich; University of Cologne
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2009.12.007
• 发表日期: 2010
• 页码: 312-328
• 关键词: Contract theory; linear contracts; incentives; Sufficient statistics result; inequity aversion; incomplete contracts

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.