| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 5072134 | Games and Economic Behavior | 2011 | 23 Pages |
Abstract
⺠We study the effects of overconfidence on incentive contracts with moral hazard. ⺠An overconfident agent tends to prefer higher-powered incentives. ⺠Lower-powered incentives are sufficient to induce effort. ⺠There are possible efficiency gains stemming from agent overconfidence. ⺠An increase in optimism or overconfidence increases the implemented effort level.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Leonidas Enrique de la Rosa,