TY  - JOUR
A1  - Römeis, Fabio
A1  - Herweg, Fabian
A1  - Müller, Daniel
T1  - Salience bias and overwork
JF  - Games
N2  - In this study, we enrich a standard principal–agent model with hidden action by introducing salience-biased perception on the agent's side. The agent's misguided focus on salient payoffs, which leads the agent's and the principal's probability assessments to diverge, has two effects: First, the agent focuses too much on obtaining a bonus, which facilitates incentive provision. Second, the principal may exploit the diverging probability assessments to relax participation. We show that salience bias can reverse the nature of the inefficiency arising from moral hazard; i.e., the principal does not necessarily provide insufficient incentives that result in inefficiently low effort but instead may well provide excessive incentives that result in inefficiently high effort.
KW  - context-dependent preferences
KW  - hidden action
KW  - moral hazard
KW  - overwork
KW  - salience theory
Y1  - 2022
U6  - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:bvb:20-opus-255213
SN  - 2073-4336
VL  - 13
IS  - 1
ER  - 
TY  - JOUR
A1  - Müller, Daniel
A1  - Schmitz, Patrick W.
T1  - Transaction costs and the property rights approach to the theory of the firm
JF  - European Economic Review
N2  - The standard property rights approach is focused on ex ante investment incentives, while there are no transaction costs that might restrain ex post negotiations. We explore the implications of such transaction costs. Prominent conclusions of the property rights theory may be overturned: A party may have stronger investment incentives when a non investing party is the owner, and joint ownership can be the uniquely optimal ownership structure. Intuitively, an ownership structure that is unattractive in the standard model may now be desirable, because it implies large gains from trade, such that the parties are more inclined to incur the transaction costs.
KW  - Incomplete contracts
KW  - Property rights approach
KW  - Vertical integration
KW  - Joint ownership
KW  - Transaction costs
Y1  - 2016
U6  - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:bvb:20-opus-188042
VL  - 87
ER  -