Can Technology Solve the Principal-Agent Problem? Evidence from Chinaâ's War on Air Pollution

2020 ◽  
Author(s):  
Michael Greenstone ◽  
Guojun He ◽  
Ruixue Jia ◽  
Tong Liu
Keyword(s):  
Air Pollution ◽  
Principal Agent ◽  
Principal Agent Problem

scholarly journals Incentivizing by example and money

2020 ◽  
Author(s):  
Thomas Bauer ◽  
Franz Wirl
Keyword(s):  
Private Information ◽  
Financial Incentives ◽  
Role Models ◽  
Principal Agent ◽  
Principal Agent Problem ◽  
Reservation Utility

AbstractLeaders are role models that affect their employees’ efforts. The effect depends on how much an employee identifies with the “boss”. Since this degree of identification is private information of the employee, additional financial incentives must be provided. Therefore, we study a principal-agent problem in which the principal affects the agent’s effort by her own effort and by financial incentives. The resulting principal-agent problem has a few non-standard specifics such as: (i) bilateral externalities as the principal’s effort affects the agent and vice versa and (ii) endogenous reservation utility of the agent. Combined, this leads to non-trivial and interesting contracts.

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