Staedter, Silvio (2018) The effects of pay regulation when agents are loss averse. APPLIED ECONOMICS LETTERS, 25 (21). pp. 1493-1498. ISSN 1350-4851, 1466-4291
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This article analyses the effects of a regulatory cap on executive pay when the agent is loss averse. I use a principal-agent model with moral hazard in which a principal and an agent bargain over an incentive contract. I show that even a non-binding cap on the agent's payments can have consequences for the bargained outcome and consequently for the effort the agent exerts.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | REFERENCE-DEPENDENT PREFERENCES; PROSPECT-THEORY; BARGAINING PROBLEMS; ASSET PRICES; CEO PAY; BEHAVIOR; DISPOSITION; MANAGERS; MARKET; CLAIMS; Regulatory pay cap; incentive contract; moral hazard; loss aversion; Nash bargaining solution; C71; D82; J33 |
| Subjects: | 300 Social sciences > 330 Economics |
| Divisions: | Business, Economics and Information Systems > Institut für Volkswirtschaftslehre und Ökonometrie Business, Economics and Information Systems > Institut für Volkswirtschaftslehre und Ökonometrie > Lehrstuhl für Mikroökonomik (Prof. Dr. Andreas Roider) |
| Depositing User: | Dr. Gernot Deinzer |
| Date Deposited: | 20 Mar 2020 09:10 |
| Last Modified: | 20 Mar 2020 09:10 |
| URI: | https://pred.uni-regensburg.de/id/eprint/15338 |
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