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Moral hazard in teams with limited punishments and multiple outputs

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dc.affiliation.dptoUC3M. Departamento de Economía de la Empresaes
dc.contributor.authorQuintero Jaramillo, Jose E.es
dc.date.accessioned2006-11-07T11:13:57Z
dc.date.available2006-11-07T11:13:57Z
dc.date.issued2004-01es
dc.description.abstractThis paper studies incentive provision with limited punishments. It revisits the moral hazard problem with risk neutral parties and solves for optimal compensation schemes in situations where agents' participation is implied by a limited liability constraint. Providing minimum cost incentives to teams or individuals requires awarding high bonuses only when extreme performances are observed. Even when the first-best is attainable, the principal may prefer to induce more (or less) effort than it is sociably desirable because she only cares about the marginal cost of motivation. With positive production externalities joint bonuses are optimal. With limited liability on the principal's side, the optimal scheme becomes a tournament-even in the absence of externalities. The paper also looks at conditions that favor one incentive scheme over another when agents adapt their strategies as information becomes available.es
dc.format.extent704305 bytes
dc.format.mimetypeapplication/pdf
dc.identifier.repecwb040705
dc.identifier.urihttps://hdl.handle.net/10016/93
dc.language.isoenges
dc.relation.ispartofseriesWorkings Paper. Bussiness Economicses
dc.relation.ispartofseries2004-05es
dc.rights.accessRightsopen access
dc.subject.ecienciaEmpresa
dc.titleMoral hazard in teams with limited punishments and multiple outputses
dc.typeworking paper*
dspace.entity.typePublication
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