The Impact of Incentive Pay on Corporate Crime

The Impact of Incentive Pay on Corporate Crime

This paper presents a moral hazard model analyzing the agent's incentive to commit corporate crime. The principal can only observe profits which the agent can increase by committing crime or exerting effort. It is shown how different incentive contracts, i.e., thresholdlinear, capped bonus...

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Bibliografski detalji
Izdano u:MAGKS - Joint Discussion Paper Series in Economics (Band 52-2017)
Glavni autor: Herold, Daniel
Format: Članak
Jezik:engleski
Izdano: Philipps-Universität Marburg 2017
Teme:
cartels
Wirtschaft
corporate crime
moral hazard
incentive pay
Economics
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Opis
Sažetak:This paper presents a moral hazard model analyzing the agent's incentive to commit corporate crime. The principal can only observe profits which the agent can increase by committing crime or exerting effort. It is shown how different incentive contracts, i.e., thresholdlinear, capped bonus and linear contracts, can be adjusted in order to promote agent's law abiding behavior. Any adjustment implies a loss in internal efficiency which decreases in individual sanctions imposed on the agent.
Opis fizičkog objekta:34 Seiten
ISSN:1867-3678
Digitalni identifikator objekta:10.17192/es2024.0549

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