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http://hdl.handle.net/10419/33151
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| Title: | | Performance pay and risk aversion  |
| Authors: | | Grund, Christian Sliwka, Dirk |
| Issue Date: | | 2006 |
| Series/Report no.: | | IZA Discussion Papers 2012 |
| Abstract: | | 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. |
| Subjects: | | risk incentives agency theory risk aversion performance appraisal pay for performance GSOEP |
| JEL: | | J33 M52 D80 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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