The impact of inequity aversion on relational incentive contracts [Elektronische Ressource] / von Jenny Kragl

The Impact of Inequity Aversion on RelationalIncentive ContractsDISSERTATIONzur Erlangung des akademischen Gradesdoctor rerum politicarum(Doktor der Wirtschaftswissenschaft)eingereicht an derWirtschaftswissenschaftlichen FakultätHumboldt-Universität zu BerlinvonFrau Dipl.-Kffr. Jenny Kraglgeboren am 18.12.1978 in BerlinPräsident der Humboldt-Universität zu Berlin:Prof. Dr. Dr. h.c. Christoph MarkschiesDekan der Wirtschaftswissenschaftlichen Fakultät:Prof. Oliver Günther, Ph.D.Gutachter:1. Prof. Dominique Demougin, Ph.D.2. Prof. Dr. Franz HubertTag des Kolloquiums: 16. Februar 2009AbstractThis thesis consists of three self-contained essays that investigate the impact offairness concerns among agents on the efficient design of real-world incentive contractsused to mitigate moral-hazard problems under non-verifiable performance. All papersconsider situations in which a firm employs two inequity averse workers whose individ-ual performances are, albeit observable by the contracting parties, not contractible.The first paper studies the effects of inequity aversion on relational employmentcontracts. Performance is evaluated via an agent’s individual non-verifiable contribu-tion to firm value. In contrast to the literature, we find that inequity aversion maybe beneficial: In the presence of envy, for a certain range of interest rates relationalcontracts may be more profitable. For some interest rates reputational equilibria existonly with envious agents.