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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 analyzed 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. Journal of Economic Literature classiffication numbers: D82, J21, L13, L22. Keywords: Cournot Competition, Contract Delegation, Moral Hazard, Entry, Market Size, Wage Cost.
2009
338 - Situació econòmica. Política econòmica. Gestió, control i planificació de l'economia. Producció. Serveis. Turisme. Preus
Mercat de treball
Oligopolis-Models economètrics
Rendiment industrial
Competència econòmica
Aquest document està subjecte a una llicència d'ús de Creative Commons, amb la qual es permet copiar, distribuir i comunicar públicament l'obra sempre que se'n citin l'autor original, la universitat i el departament i no se'n faci cap ús comercial ni obra derivada, tal com queda estipulat en la llicència d'ús (http://creativecommons.org/licenses/by-nc-nd/2.5/es/)
Working Paper
1988 - 0812
Documents de treball del Departament d'Economia;2009-03
         

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