Delegation, Worker Compensation, and Strategic Competition

DSpace Repository


Dateien:
Aufrufstatistik

URI: http://nbn-resolving.de/urn:nbn:de:bsz:21-opus-72069
http://hdl.handle.net/10900/48041
Dokumentart: ResearchPaper
Date: 2014
Source: University of Tübingen Working Papers in Economics and Finance ; 67
Language: English
Faculty: 6 Wirtschafts- und Sozialwissenschaftliche Fakultät
Department: Wirtschaftswissenschaften
DDC Classifikation: 330 - Economics
Keywords: Delegation
Other Keywords:
agency theory , compensation schemes
License: Publishing license excluding print on demand
Show full item record

Abstract:

We study interfirm competition on a product market where effort decisions are delegated to the firms’ workers. Intrafirm organization is captured by a principal-multiagent framework where firm owners implement alternative compensation schemes for the workers. We show that the value of delegation as well as the optimal design of the compensation scheme crucially depend on the intensity of competition. In particular, our model explains why piece rates and performance-based revenue sharing may be observed in different markets at the same time.

This item appears in the following Collection(s)