Bonus Culture: Competitive Pay, Screening, and Multitasking

• 成果类型: Article
• 署名作者: Benabou, Roland; Tirole, Jean
• 署名单位: Princeton University; Canadian Institute for Advanced Research (CIFAR); National Bureau of Economic Research; IZA Institute Labor Economics; Universite de Toulouse; Universite Toulouse 1 Capitole; Toulouse School of Economics
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/684853
• 发表日期: 2016
• 页码: 305-370
• 关键词: product market competition; adverse selection; executive-compensation; insurance markets; performance pay; ceo incentives; ECONOMICS; principal; firm; INFORMATION

摘要

To analyze the impact of labor market competition on the structure of compensation, we embed multitasking and screening within a Hotelling framework. Competition for talent leads to an escalation of performance pay, shifting effort away from long-term investments, risk management, and cooperation. Efficiency losses can exceed those from a single principal, who dulls incentives to extract rents. As competition intensifies, monopsonistic underincentivization of low-skill agents first decreases and then gives way to growing overincentivization of high-skill ones. Aggregate welfare is thus hill-shaped, while inequality tends to rise monotonically. Bonus caps can help restore balance in incentives but may generate other distortions.