Social Preferences, Sorting, and Employment Contracts

Siemens, Ferdinand von

doi:10.2139/ssrn.967634

Cited by 7 publications

(3 citation statements)

References 33 publications

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“…Recently, contract theorists such as Casadesus-Masanell (2004) and Rob and Zemsky (2002) have expressed the view that contract theory could be made more descriptive and effective by incorporating some form of behavioral considerations into the analysis. von Siemens (2004) considers optimal contracts in relation to hidden information and social preferences, finding that inequity aversion (Fehr and Schmidt, 1999) "increases the distortions originating from asymmetric information in a monopsony. " We are only aware of two experimental studies of the static principal-agent problem with hidden information.…”

Section: Introductionmentioning

confidence: 99%

Optimal contracts with team production and hidden information: An experiment

Cabrales

Charness

2011

Journal of Economic Behavior & Organization

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Section: Introductionmentioning

confidence: 99%

Optimal contracts with team production and hidden information: An experiment

Cabrales

Charness

2011

Journal of Economic Behavior & Organization

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“…3 3 Cabrales and Calvó‐Armengol (2008) and von Siemens (forthcoming) look at worker segregation by ability if workers are also inequity averse. They assume that effort is contractible and do not analyze cooperation within teams.…”

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confidence: 99%

Competition, cooperation, and corporate culture

Kosfeld¹,

Siemens²

2011

The RAND J of Economics

111

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Cooperation between workers can be of substantial value to a firm, yet its level often varies substantially between firms. We show that these differences can unfold in a competitive labor market if workers have heterogeneous social preferences and preferences are private information. In our model, workers differ in their willingness to cooperate voluntarily. We show that there always exists a separating equilibrium in which workers self‐select into firms that differ in their monetary incentives as well as their level of worker cooperation. Our model highlights the role of sorting and worker heterogeneity in the emergence of heterogeneous corporate cultures. It also provides a new explanation for the coexistence of nonprofit and for‐profit firms. “Here you don’t communicate. And sometimes you end up not knowing things. … Everyone says we need effective communication. But it’s a low priority in action. … The hardest thing at the gates when flights are delayed is to get information.” “There is constant communication between service and the ramp. When planes have to be switched and bags must be moved, customer service will advise the ramp directly or through operations. If there’s an aircraft swap operations keeps everyone informed. … It happens smoothly.”

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“…. The same result holds true if types are private information (e.g.,Delfgaauw and Dur forthcoming;von Siemens 2006).…”

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confidence: 99%