The name of the game is to keep your employees engaged in their work and make as much money as possible. In our basic principal-agent model where you’re trying to figure out how much to pay someone for their effort, it’s been empirically proven that a 100% commission rate let’s agents make enough money toContinue reading “How to pay who — risk and multidimensional roles”
Category Archives: Personnel Economics
First written midterm: practice questions
Summary: Testing The Theory of Multitasking: Evidence from a Natural Field Experiment in Chinese Factories (Hong)
The following is a brief summary of a working paper published by the National Bureau of Economic Research on the effects of bonus-pay schemes in firms where workers’ output is judged on multiple dimensions including quality. Principal-agent relations present an omnipresent feature to modern economies. The fundamental issue is that the worker (the agent) hasContinue reading “Summary: Testing The Theory of Multitasking: Evidence from a Natural Field Experiment in Chinese Factories (Hong)”
Summary: Race, Tenure and Resource Allocation in Southern Agriculture, 1910 (Higgs)
“We have inherited from the literature on the post-bellum South the image of a society ruled by force and violence, divided by racism and class distinctions, immobilized by ignorance and agrarian traditions. There is, of course, a large element of truth in all this. But too often this image has paralyzed critical thought, especially aboutContinue reading “Summary: Race, Tenure and Resource Allocation in Southern Agriculture, 1910 (Higgs)”
Week 0: Introduction to Personnel Economics
Exchanging your efforts in return for wages is quite possibly the most important transaction in the entire economy. The amount a firm pays you directly affects their bottom line profits and your quality of life. I’m not going to tell you how to live your best life, but for me, living my best life isContinue reading “Week 0: Introduction to Personnel Economics”
Summary: Do Agents Game Their Agents’ Behavior? Evidence from Sales Managers (Benson)
The Firm, the Managers and the Employees – Do their interests align? Allen Benson examines how sales managers game the staffing and incentives of their subordinates and looks at the imperfect ability of organizational hierarchies to motivate employees to act on the organization’s behalf. The study examines data in 244 firms provided by on-demand (cloud)Continue reading “Summary: Do Agents Game Their Agents’ Behavior? Evidence from Sales Managers (Benson)”
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