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Moral hazard contracts: Does one size fit all?

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  • Koch, Alexander K.
  • Peyrache, Eloïc

Abstract

We show that firms' practice of anonymous contracts ("one-size-fits-all") can be reconciled with standard agency theory if careers are marked by frequent transitions between employers, and agents have career concerns because complete long-term contracts are not feasible.

Suggested Citation

  • Koch, Alexander K. & Peyrache, Eloïc, 2008. "Moral hazard contracts: Does one size fit all?," Economics Letters, Elsevier, vol. 100(3), pages 399-401, September.
    • Handle: RePEc:eee:ecolet:v:100:y:2008:i:3:p:399-401
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    1. Armando Levy & Tomislav Vukina, 2002. "Optimal linear contracts with heterogeneous agents," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 29(2), pages 205-217, June.
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    12. Fenghua Song & Anjan V. Thakor, 2006. "Information Control, Career Concerns, and Corporate Governance," Journal of Finance, American Finance Association, vol. 61(4), pages 1845-1896, August.
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    Cited by:

    1. Nafziger, Julia, 2008. "Job Assignments, Intrinsic Motivation and Explicit Incentives," Bonn Econ Discussion Papers 5/2008, University of Bonn, Bonn Graduate School of Economics (BGSE).
    2. Alexander K. Koch & Eloïc Peyrache, 2011. "Aligning Ambition and Incentives," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 27(3), pages 655-688.

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    More about this item

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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