@techreport{Krakel2006Should,
abstract = {We discuss a principal-agent model in which the principal has the opportunity to include a non-compete agreement in the employment contract. We show that not imposing such an agreement can be beneficial for the principal as the possibility to leave the firm generates implicit incentives for the agent. The principal prefers to impose such a clause if and only if the value created is su? ciently small relative to the agent\textasciiacute{}s outside option. If the principal can use an option contract for retaining the agent, she will never prefer a strict non-compete agreement.},
author = {Matthias Kr\"{a}kel and Dirk Sliwka},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {J3; M5; D86; D21; K1; 330; fine; incentives; incomplete contracts; non-compete agreements; option contract},
language = {eng},
number = {2006,4},
title = {Should You Allow Your Agent to Become Your Competitor?: On Non-Compete Agreements in Employment Contracts},
type = {Bonn econ discussion papers},
url = {http://hdl.handle.net/10419/22949},
year = {2006}
}
