Beyond Moral Hazard: The Effect of Firm Level Compensation Strategies on Economic Conflict
In many countries governments are helpless to prevent appropriation, whatever the degree of protection promised by the law. In this context, we use a simple model where workers can either work peacefully or join a guerrilla movement that expropriates entrepreneurs. We find one low-income, low-wage e...
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ir-1992-467942020-11-04T20:23:15Z Beyond Moral Hazard: The Effect of Firm Level Compensation Strategies on Economic Conflict Andonova, V. Zuleta, H. Conflict Efficiency wages Income distribution Multiple equilibria In many countries governments are helpless to prevent appropriation, whatever the degree of protection promised by the law. In this context, we use a simple model where workers can either work peacefully or join a guerrilla movement that expropriates entrepreneurs. We find one low-income, low-wage equilibrium with guerrilla activity and one peaceful, high-income, high-wage equilibrium. We show that the peaceful equilibrium can be reached if entrepreneurs implement standard remedies for the internal principal-agent problem such as efficiency wages. 2020-10-01T16:42:31Z 2020-10-01T16:42:31Z 2009 article publishedVersion http://hdl.handle.net/1992/46794 http://www.degruyter.com/view/j/peps.2009.15.issue-1/peps.2009.15.1.1149/peps.2009.15.1.1149.xml eng openAccess application/pdf instname:Universidad de los Andes reponame:Repositorio Institucional Séneca |
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Universidad de los Andes |
collection |
DSpace |
language |
Inglés (English) |
topic |
Conflict Efficiency wages Income distribution Multiple equilibria |
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Conflict Efficiency wages Income distribution Multiple equilibria Andonova, V. Zuleta, H. Beyond Moral Hazard: The Effect of Firm Level Compensation Strategies on Economic Conflict |
description |
In many countries governments are helpless to prevent appropriation, whatever the degree of protection promised by the law. In this context, we use a simple model where workers can either work peacefully or join a guerrilla movement that expropriates entrepreneurs. We find one low-income, low-wage equilibrium with guerrilla activity and one peaceful, high-income, high-wage equilibrium. We show that the peaceful equilibrium can be reached if entrepreneurs implement standard remedies for the internal principal-agent problem such as efficiency wages. |
format |
Artículo (Article) |
author |
Andonova, V. Zuleta, H. |
author_facet |
Andonova, V. Zuleta, H. |
author_sort |
Andonova, V. |
title |
Beyond Moral Hazard: The Effect of Firm Level Compensation Strategies on Economic Conflict |
title_short |
Beyond Moral Hazard: The Effect of Firm Level Compensation Strategies on Economic Conflict |
title_full |
Beyond Moral Hazard: The Effect of Firm Level Compensation Strategies on Economic Conflict |
title_fullStr |
Beyond Moral Hazard: The Effect of Firm Level Compensation Strategies on Economic Conflict |
title_full_unstemmed |
Beyond Moral Hazard: The Effect of Firm Level Compensation Strategies on Economic Conflict |
title_sort |
beyond moral hazard: the effect of firm level compensation strategies on economic conflict |
publishDate |
2020 |
url |
http://hdl.handle.net/1992/46794 |
_version_ |
1705934434499297280 |
score |
12,131701 |