Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/90880 
Year of Publication: 
2014
Series/Report no.: 
University of Tübingen Working Papers in Economics and Finance No. 67
Publisher: 
University of Tübingen, Faculty of Economics and Social Sciences, Tübingen
Abstract: 
We study interfirm competition on a product market where effort decisions are delegated to the firms' workers. Intrafirm organization is captured by a principal-multiagent framework where firm owners implement alternative compensation schemes for the workers. We show that the value of delegation as well as the optimal design of the compensation scheme crucially depend on the intensity of competition. In particular, our model explains why piece rates and performance-based revenue sharing may be observed in different markets at the same time.
Subjects: 
delegation
agency theory
compensation schemes
JEL: 
C72
L22
M52
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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