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Modeling employees' deviant behavior and employers' reactions: an interdisciplinary approach using principal-agent and prospect theories

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  • Aharon Tziner
  • Erich C. Fein

Abstract

In this paper we introduce mathematical models to address deviant behavior theory and practice. We examine only employee behaviors and employer reactions, but this framework is innovative and parsimonious, in that it models employer responses to employee’s behavioral deviance based on the dual application of principal-agent theory and prospect theory. After explaining the model, we examine boundary conditions and limitations and propose a series of applications to illustrate the potential usefulness of the model.

Suggested Citation

  • Aharon Tziner & Erich C. Fein, 2012. "Modeling employees' deviant behavior and employers' reactions: an interdisciplinary approach using principal-agent and prospect theories," Economics and Business Letters, Oviedo University Press, vol. 1(4), pages 10-20.
    • Handle: RePEc:ove:journl:aid:9527
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    File URL: https://reunido.uniovi.es/index.php/EBL/article/view/9527
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    References listed on IDEAS

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    1. Moran Bodankin & Aharon Tziner, 2009. "Constructive Deviance, Destructive Deviance and Personality: How do they interrelate?," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 11(26), pages 549-564, June.
    2. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
    3. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    4. Yoav Vardi & Yoash Wiener, 1996. "Misbehavior in Organizations: A Motivational Framework," Organization Science, INFORMS, vol. 7(2), pages 151-165, April.
    5. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    6. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    7. Saul Fine, 2012. "Estimating the economic impact of personnel selection tools on counterproductive work behaviors," Economics and Business Letters, Oviedo University Press, vol. 1(4), pages 1-9.
    8. Fama, Eugene F, 1980. "Agency Problems and the Theory of the Firm," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 288-307, April.
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    Cited by:

    1. Aharon Tziner & Assa Birati, 2015. "Assessing the Financial Value of Human Resource Management Programs and Employee Behaviors: A Critical Tool Still Coming of Age," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(S9), pages 1259-1259, November.
    2. Aharon Tziner & Assa Birati, 2015. "Assessing the Financial Value of Human Resource Management Programs and Employee Behaviors: A Critical Tool Still Coming of Age," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(Special 9), pages 1259-1259, November.

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