Efficiency Wages and X-Inefficiencies
Tore Ellingsen ()
Scandinavian Journal of Economics, 1997, vol. 99, issue 4, 581-96
Within most organizations, agents may spend time on a variety of tasks--productive and redistributive. In this paper, the author derives an optimal multitask incentive scheme under the assumption that agents have limited liability. The wage level is shown to increase with an agent's discretion and the organization's profits. With multiple agents, it is generally not optimal for the principal to fully eliminate distributional conflict within the organization. The resulting influence costs constitute a measure of X-inefficiency. The analysis illuminates the relationship between competition and influence costs, emphasizing the role of the organization's production technology. Copyright 1997 by The editors of the Scandinavian Journal of Economics.
References: Add references at CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed
Downloads: (external link)
http://www.blackwell-synergy.com/servlet/useragent ... &year=1997&part=null link to full text (text/html)
Access to full text is restricted to subscribers.
Working Paper: Efficiency Wages and X-Inefficiencies (1997)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bla:scandj:v:99:y:1997:i:4:p:581-96
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0347-0520
Access Statistics for this article
Scandinavian Journal of Economics is currently edited by Richard Friberg, Matti Liski and Kjetil Storesletten
More articles in Scandinavian Journal of Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().