Are tournaments optimal over piece rates under limited liability for the principal?
A highly acclaimed result is that tournaments are superior to piece rates when the agents are risk averse and their production activities are subject to a relatively large common shock. The reason is that tournaments allow the principal to trade insurance for lower income to the agents. Our analysis...
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| Main Authors: | , |
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| Format: | text |
| Language: | English |
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Institutional Knowledge at Singapore Management University
2013
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| Online Access: | https://ink.library.smu.edu.sg/soe_research/2345 https://ink.library.smu.edu.sg/context/soe_research/article/3344/viewcontent/1_s2.0_S0167718712001221_main.pdf |
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| Institution: | Singapore Management University |
| Language: | English |