Labour Incentive Schemes in a Cournot Duopoly with Simple Institutional Constraints

This paper studies equilibrium incentive contracts in a Cournot duopoly, in which institutional arrangements constrain firms to pay (risk-neutral) workers a given salary. In this context, performance-related-pay (PRP) and relative performance evaluation (RPE) are compared in terms of resulting levels of workers' effort (firms' expected output), market price, profits, consumer surplus and social welfare. It is shown that, while under principal-agent standard assumptions (i.e. all wage components are "freely" negotiated by each firm-worker pair) PRP and RPE are equivalent, in the presence of institutional "frictions", RPE outperforms PRP in relation to output, profits, consumer surplus and social welfare. Moreover, RPE also permits to replicate results obtained without institutional constraints, even if the mechanism driving final outcomes is very different.Cournot duopoly, principal-agent model, relative performance evaluation, institutional constraints

A strategic analysis of incorporating CSR into managerial incentive design

A strategic analysis is conducted to incorporate corporate social responsibility (CSR) considerations into managerial incentive design in a duopoly where each firm comprises an owner and a manager. Consumer surplus is adopted to represent the firms' CSR concerns and a CSR-related incentive is introduced to accommodate both profit and consumer surplus. Bertrand and Cournot competition modes are discussed with the firms' products being complementary, independent, or substitutable. We first examine the equilibrium of CSR-related incentive design and, then, analyze how CSR-related incentives affect the firms' profitability and CSR performance, measured by consumer surplus and social welfare

Avaliação relativa de desempenho na compensação pecuniária de executivos: evidências empíricas no Brasil

The objective of this study was to analyze the implicit use of relative performance evaluation in BM&FBovespa listed companies as a way to measure the remuneration of its executives. To define the sample, we sought to identify companies that disclosed information about the compensation of their executives between 2009 and 2012, totaling the sample size in 67 companies, totaling 112 observations. They were then categorized in order to capture risk sharing as predicted by the theory of relative performance evaluation. The results of this research indicate a strong asymmetry in the distribution of the compensation, mainly due to the long-term compensation, which caused the occurrence of outliers. As a result of this situation, and following studies already developed, it was decided to test the model through quantile regression. Even with the use of the median regression it was not possible to identify statistically significant evidences of the occurrence of relative performance evaluation, therefore, there is no evidence that the variation of the result of the sector reduces the impacts that the results obtained by the organizations exercise on the executive remuneration.O objetivo deste estudo foi analisar o uso implícito de avaliação relativa de desempenho em empresas listadas na BM&FBovespa como forma de aferir a remuneração de seus executivos. Para definição da amostra buscou-se identificar empresas que divulgaram as informações acerca da remuneração de seus executivos entre os anos de 2009 a 2012, totalizando o tamanho da amostra em 67 empresas, totalizando 112 observações. Em seguida, elas foram classificadas setorialmente de forma a capturar o compartilhamento do risco conforme prediz a teoria da avaliação relativa de desempenho. Os resultados desta pesquisa indicam uma forte assimetria da distribuição da compensação decorrente, principalmente, da compensação de longo-prazo, o que ocasionou a ocorrência de outliers. Como decorrência de tal situação, e seguindo estudos já desenvolvidos, optou-se por testar o modelo por meio de regressão quantílica. Mesmo com o uso da regressão mediana não foi possível identificar evidências estatisticamente significantes da ocorrência de avaliação relativa de desempenho, logo, não há evidências de que a variação do resultado do setor reduza os impactos que os resultados auferidos pelas organizações exercem sobre a remuneração executiva

Forschungsbericht Universität Mannheim 2010 / 2011

Der Forschungsbericht bietet Ihnen eine Übersicht über die Forschungsschwerpunkte der Fakultäten, Abteilungen und Forschungseinrichtungen der Universität Mannheim. Dazu enthält der vorliegende Forschungsbericht Informationen über Einzelprojekte in den jeweiligen Fachdisziplinen sowie über zumeist fächerübergreifende Verbundprojekte wie Sonderforschungsbereiche, Forschergruppen, Wissenschaftscampi, Graduiertenschulen und Promotionskollegs. Die aus den Forschungsaktivitäten hervorgegangenen Publikationen, die Sie in diesem Bericht aufgelistet finden, leisten wichtige Beiträge zum wissenschaftlichen Fortschritt innerhalb der Disziplinen. Die ebenfalls aufgeführten Transferleistungen stellen Beiträge der Grundlagenwissenschaft zur Lösung gesellschaftlicher und wirtschaftlicher Herausforderungen dar. Nicht zuletzt enthält der Forschungsbericht Angaben zu wissenschaftlichen Preisen und Auszeichnungen, zu Veranstaltungen und Tagungen sowie zu akademischen Qualifikationen im Sinne von Promotionen und Habilitationen. Diese Angaben reflektieren die Reputation der Wissenschaftlerinnen und Wissenschaftler und ergänzen die sonstigen forschungsbezogenen Leistungen an der Universität Mannheim

Forschungsbericht Universität Mannheim 2008 / 2009

Die Universität Mannheim hat seit ihrer Entstehung ein spezifisches Forschungsprofil, welches sich in ihrer Entwicklung und derz eitigen Struktur deutlich widerspiegelt. Es ist geprägt von national und international sehr anerkannten Wirtschafts- und Sozialwissenschaften und deren Vernetzung mit leistungsstarken Geisteswissenschaften, Rechtswissenschaft sowie Mathematik und Informatik. Die Universität Mannheim wird auch in Zukunft einerseits die Forschungsschwerpunkte in den Wirtschafts- und Sozialwissenschaften fördern und andererseits eine interdisziplinäre Kultur im Zusammenspiel aller Fächer der Universität anstreben

Relative performance evaluation and contract externalities

We consider the incentive characteristics of optimal linear contracts based on relative performance evaluation (RPE) for managers undermoral hazard in imperfectly competitive product markets. Each contract influences the quantity choices of all competing agents causing contract externalities that affect the principals ’ contracting game. We analyze the relations between the optimal extent of RPE and several firm and market characteristics, especially allowing for heterogeneous firm characteristics and imperfectly correlated firm profits. We find non-monotonic comparative static results, which yield an explanation for the mixed empirical results in the literature and may help to improve the empirical evidence regarding RPE