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Prinzipal-Agent-Beziehung: First-best, second-best und third-best

Year:    2000

Author:    Kraft, Holger, Reichling, Peter

Credit and Capital Markets – Kredit und Kapital, Vol. 33 (2000), Iss. 2 : pp. 151–181

Abstract

Relationship between Principal and Agent: First-best, Second-best and Third-best

This contribution discusses in discret language the classical relationship between principal and agent. It focuses on the pay-scale monotony. One of this contribution’s aims is to give a synopsis of the conditions that would ensure pay rises in second-best cases. The fact that the discussion focuses on risk-neutral principals only permits the general statement that second-best pay-scales either remain constant or point upward in at least one respect. This explains why second-best pay-scales dropping section-wise are characteristic of certain situations.

Where second-best pay-scales dropping section-wise are not permissible (thirdbest cases) the result is a loss in prosperity on account of the fact that any artificial pay-scale monotonisation reduces its stimulating effect. Moreover, the salaries principals pay their agents tend to be on the high side in the case of major backflows

Journal Article Details

Publisher Name:    Global Science Press

Language:    Multiple languages

DOI:    https://doi.org/10.3790/ccm.33.2.151

Credit and Capital Markets – Kredit und Kapital, Vol. 33 (2000), Iss. 2 : pp. 151–181

Published online:    2000-02

AMS Subject Headings:    Duncker & Humblot

Copyright:    COPYRIGHT: © Global Science Press

Pages:    31

Author Details

Kraft, Holger Email

Reichling, Peter Email

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