Abstract
Analysis of management compensation has focused on the principal — agent problem. We address the problem confronting owners who must choose a manager without knowing the productivity of individual managers. We find performance contingent contracts may result in a separating equilibrium in which high productivity managers accept contracts low productivity managers find unacceptable.
Original language | English (US) |
---|---|
Pages (from-to) | 94-108 |
Number of pages | 15 |
Journal | Studies in Economics and Finance |
Volume | 18 |
Issue number | 2 |
DOIs | |
State | Published - Feb 1 1998 |
ASJC Scopus subject areas
- General Economics, Econometrics and Finance