Skip to Main content Skip to Navigation
Master Thesis

Does business abilities of the manager increase efficiency of incentive?

Abstract : In this work, we intend to answer the question if ability of the manager increase efficiency of incentive. We first create a mathematical model on a principal-agent relationship. The assumption is to consider the performance of the manager as a source of legitimacy which is a factor that will change the tolerance to inequity of the agent. Two main prediction of this model are: 1) if the performance of the manager is lowers than the performance of the agent, every thing held equal the agent will decrease his effort. 2) if the performance of the manager is lowers than the performance of the agent, he will have to increase the piece rate he proposes in the contract to limit the negative impact of his illegitimacy on the agent effort. Then, we design and make an pilot experiment that attempt to observe in lab the first prediction of the model. Our preliminary results with a session of 14 participant are not statistically significant. However, they go in the direction of the theoretical model and could inspire us to perform other session.
Document type :
Master Thesis
Complete list of metadatas

Cited literature [14 references]  Display  Hide  Download

https://dumas.ccsd.cnrs.fr/dumas-01074768
Contributor : Nelly Wirth <>
Submitted on : Wednesday, October 15, 2014 - 2:09:41 PM
Last modification on : Thursday, April 30, 2020 - 3:12:06 PM
Long-term archiving on: : Friday, January 16, 2015 - 10:31:46 AM

File

Emilien PROST.pdf
Files produced by the author(s)

Identifiers

  • HAL Id : dumas-01074768, version 1

Citation

Émilien Prost. Does business abilities of the manager increase efficiency of incentive?. Economics and Finance. 2014. ⟨dumas-01074768⟩

Share

Metrics

Record views

423

Files downloads

217