Performance pay and risk aversion
By: by Christian Grund, Dirk Sliwka
Contributors: Sliwka, Dirk
Series: Discussion paper -- no. 2012; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) -- no. 2012
Publisher: IZA
Published: 2006
Place of publication: Bonn, Germany
Language: eng
Format: [electronic resource] /
Subjects: Merit pay; Risk; Uncertainty
Description: "A main prediction of agency theory is the well known risk-incentive trade-off. Incentive contracts should be found in environments with little uncertainty and for agents with low degrees of risk aversion. There is an ongoing debate in the literature about the first trade-off. Due to lack of data, there has so far been hardly any empirical evidence about the second. Making use of a unique representative data set, we find clear evidence that risk aversion has a highly significant and substantial negative impact on the probability that an employee's pay is performance contingent"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Title from PDF file as viewed on 3/13/2006.

Includes bibliographical references.

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Mode of access: World Wide Web.