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Firm competition and incentive pay: Rent seeking at work
Stockholm University, Faculty of Social Sciences, Department of Economics.
2011 (English)In: Economics Letters, ISSN 0165-1765, E-ISSN 1873-7374, Vol. 113, no 2, 154-156 p.Article in journal (Refereed) Published
Abstract [en]

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.
Keyword [en]
Payment methods, Competition, Rent seeking
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:su:diva-70864DOI: 10.1016/j.econlet.2011.06.006ISI: 000297396600015OAI: oai:DiVA.org:su-70864DiVA: diva2:483498
Note
1Available from: 2012-01-25 Created: 2012-01-24 Last updated: 2017-12-08Bibliographically approved

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