CEU Electronic Theses and Dissertations, 2015
| Author | Lukács, Márton József |
|---|---|
| Title | Incentive Systems: Benefits of Sorting, Effort, and Some Potential Dangers |
| Summary | Incentive schemes are often argued to possess both sorting and effort related benefits for firms and employees. These efficiency gains can theoretically be utilized in a Pareto improving manner. Conversely, theory also suggests there are potential dangers associated with incentive schemes, such as increased risk taking (deterioration of quality), and the ability of firms to annex employee surplus through information asymmetries. In this paper I test some of the basic theoretical concepts behind incentive schemes with the help of replicated and self-devised empirical analysis, and I show that if a number of important conditions are met, [convex] incentive schemes can be a vital tool for firms to increase their efficiencies in Pareto improving manner. |
| Supervisor | Earle, John |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2015/lukacs_marton.pdf |
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