Datum

Name

Thema

 University College London

Universität Bonn

 Abstract

Several empirical findings have challenged the traditional view on the trade-off between risk and incentives. By combining risk aversion and limited liability in a standard principal-agent model the empirical puzzle on the positive relationship between risk and incentives can be explained. Increasing risk leads to a less informative performance signal. Under limited liability, the principal may optimally react by increasing the weight on the signal and, hence, choosing higher-powered incentives.

HS 1236 (KG I )

Universität Tübingen

Empirical Evidence from the Organizational Practice“

 Abstract

Whereas the theoretical literature on organizational reward systems repeatedly points to the importance of tournament models from an efficiency perspective, very few is known about the application and effectiveness of tournament compensation in organizations, especially when contestant heterogeneity is taken into account. While the distorting effects of contestant heterogeneity on tournament incentives have been theoretically analyzed for the two-contestant-case, tournament incentives in a typical organizational context with more than two contestants and with more than one prize, have not been studied so far. In our paper, we analyze these effects theoretically as well as empirically by studying incentive travel sales contests as a quantitatively important component of compensation, and we also present first empirical evidence on (successful and unsuccessful) organizational attempts to reduce contestant heterogeneity by active handicapping and league-building.

 * 16 Uhr c.t.

Raumänderung siehe oben!

University of Minnesota

 Abstract

We analyze the dynamic relationship of evaluations of policymakers’ performance, economic policy and macroeconomic outcomes in Britain since 1984. Our results do not support the conventional view that accountability continues to exist in economically open democracies. British governments responded to changes in evaluations, and citizens rewarded them for these policy changes with higher political support. However, the impacts of fiscal and monetary policy adjustments on inflation and growth were negligible. Before the Bank of England was granted independence in 1997, the government primarily used monetary policy to respond to changes in evaluations. After 1997, fiscal policy became the government’s main economic policy instrument. In neither period did policy innovations have significant effects on Britain’s open economy.

Universität Köln

"The Power of Differentiation?  - An Empirical Investigation on the Incentive Effects of Bonus Plans"

College of William and Mary, USA

 Abstract

In this paper we investigate how label information detailing the performance of the Fair Trade labeling program with respect to coffee affect consumers willingness to pay in the United States and in Germany. We provide respondents (University students in the U.S and Germany) information regarding hypothetical benefits of the Fair Trade Coffee program on its intended beneficiaries on the production side (the revenue gains to participating marginal farmers (scope of the program)), and using stated preference conjoint methods test how this performance criterion relates to the willingness to pay for Fair Trade Coffee. Our empirical results identify a "threshold" property of performance-based labels. In effect, the willingness-to-pay for performance-based Fair Trade labeled coffee exhibits an inverted-U shape in the sense that the willingness to pay is positively related to the scope of the program, but only up to a critical level. Thereafter, the willingness to pay declines as the income gains to participating growers increases further. Interestingly, this inverted-U property is exhibited by both the U.S and German respondents with different critical thresholds.

HS 1236 (KG I )

Universität Köln

"Herding Among Groups"

 Abstract

In games of social learning individuals tend to give too much weight to their own private information relative to the information that is conveyed by the choices of others. In this paper we investigate differences between individuals and small groups as decision makers in information cascade situations. We investigate two treatment variations: 1) decisions of predecessors are taken by individual decision makers 2) or taken by small groups as decision makers. When choices of predecessors are taken by individual decision makers we find that decisions of groups comply better with Bayesian updating i.e. groups are able to abandon their own private signals more often than individuals if it is rational to do so. In all treatments models of full rational Bayesian updating explain our data better than Logit models of errors (Anderson and Holt, American Economic Review 1997). Our results extend and qualify previous research in social psychology on the performance of small groups in intellective tasks and by Charness et al. (2006) on a comparison of the ability to Bayesian updating between individuals and groups. Our findings have important implications for the design of governance structures and decision making processes in organisations, finance and other economic settings.

Universität Zürich

 Abstract

Increasing financial disparity and spiralling wages in European football have triggered a debate about the introduction of salary caps. This paper provides a theoretical model of a team sports leagues and studies the welfare effect of salary caps. It shows that salary caps will increase competitive balance and decrease overall salary payments within the league. The resulting effect on social welfare is counter-intuitive and depends on the preference of fans for aggregate talent and for competitive balance. A salary cap that binds only for large market clubs will increase social welfare if fans prefer aggregate talent despite the fact that the salary cap will result in lower aggregate talent. If fans prefer competitive balance, on the other hand, any binding salary cap will reduce social welfare.

HS 1236 (KG I )

INSEAD Fontainebleau und

Universität Freiburg

 Paper

 Abstract

To study the impact of technical change on the organization of work and management, this paper proposes a novel account to the allocation and coordination of knowledge within an organization. An organization is modeled as a team of workers and a hierarchy of managers. While workers must acquire complementary knowledge to execute those tasks required for the organization to be productive, managers have to arrange for the efficient allocation of pending tasks to those workers possessing the appropriate knowledge. To do so, managers have to acquire a different kind of knowledge - I call it ‘meta knowledge’ - about the knowledge requisite to solve a specific problem (but not the requisite knowledge itself) as well as about who in the organization possesses such requisite knowledge. Furthermore, they must communicate the respective problem to the person with the requisite knowledge. Key trade-offs therefore occur between the acquisition costs of the different kinds of knowledge and the costs of communication. Such trade-offs determine the optimal task design, the optimal degree of specialization among the workforce, and the optimal structure of hierarchy. At the same time, they allow for a differentiated analysis of technical improvements and their organizational impact.

ZEW Mannheim

 Abstract

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