Seminar: Incentives 'AND' Status

Seminar: Kolkata Incentives 'AND' Status

Speaker: Oindrila Dey, Department of Economics Jadavpur University, Kolkata

Abstract: This paper characterizes the structure of monetary incentives in an organization with varying differences in employee status. With the help of a moral hazard framework with limited liability we show that for agents with lower outside option increased status leads to lower incentive pay whereas exactly the opposite happens for agents with higher outside option. For agents with very high status such that the limited liability doesn’t bind, an exogenous increase in status level leads to an unambiguous decrease in optimal incentive payment. 

Event Date: 
Monday, 23 October 2017 - 2:00pm
Seminar Hall, Department of HSS
IIT Bombay, Powai, Mumbai