Firm competition and incentive pay: Rent seeking at work
2011 (English)In: Economics Letters, ISSN 0165-1765, Vol. 113, no 2, 154-156 p.Article in journal (Refereed) Published
Empirical evidence shows that competition among firms generates steep incentives inside firms. Incentive pay stimulates productive investments but may generate inefficient rent-seeking investments. I show that competition reduces firms' profits and thereby the inefficient investments, which makes steep incentives attractive.
Place, publisher, year, edition, pages
2011. Vol. 113, no 2, 154-156 p.
Payment methods, Competition, Rent seeking
Economics and Business
IdentifiersURN: urn:nbn:se:su:diva-70864DOI: 10.1016/j.econlet.2011.06.006ISI: 000297396600015OAI: oai:DiVA.org:su-70864DiVA: diva2:483498