Compensation, perks, and welfare

Philipp Weinschenk

Economics Letters, 2013, vol. 120, issue 1, 67-70

Abstract: In an agency model with moral hazard and limited liability, we show that the provision of perks can be inefficient, even if perks are contractible. Interestingly, there can be over- as well as underinvestment in perks. We also demonstrate that perks may actually harm the agent, although perks per se are enjoyable for the agent.

Keywords: Compensation; Perks; Agency model; Moral hazard (search for similar items in EconPapers)
JEL-codes: D82 J3 M52 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:120:y:2013:i:1:p:67-70

DOI: 10.1016/j.econlet.2013.03.048

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