Binary Payment Schemes: Moral Hazard and Loss Aversion

By Fabian Herweg, Daniel Müller, Philipp Weinschenk. 2010

211 citations recorded by the source corpus.

Subfields: Economics and Econometrics, Management Science and Operations Research, Safety Research

View Paper: https://www.semanticscholar.org/paper/4899e772faa99a5ad51b5bb2bfb26ba2329699e6

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Citations in the corpus

A Behavioral Analysis of Stochastic Reference Dependence (2016, methodology): “…generate similar behavior to cumulative prospect theory (formalized by Tversky 1 For example, Heidhues and Kőszegi (2008, 2014); Sydnor (2010); Herweg, Müller, and Weinschenk (2010); Abeler et al. (2011); Card and Dahl (2011); Crawford and Meng (2011); Pope and Schweitzer (2011); Carbajal…”
Expectations as Endowments: Evidence on Reference-Dependent Preferences from Exchange and Valuation Experiments (2011, unknown): “Other recent theoretical work applies the KR model to study optimal incentive contracts (Herweg, Müller, and Weinschenk, 2009; Macera, 2010) or bidding behavior in auctions (Lange and Ratan, 2010). ments contribute to a recent debate regarding the existence and interpretation of endowment effects…”
Expectations-Based Reference-Dependent Life-Cycle Consumption (2017, background): “…and Koszegi (2008, 2010), Herweg and Mierendorff (2012), and Rosato (2012) explore the implications for consumer pricing, which are tested by Karle et al. (2011), Herweg et al. (2010) do so for principal-agent contracts, and Eisenhuth (2012) does so for mechanism design.”
The Endowment Effect (2014, unknown): “The consequences of expectation-based reference points have also been explored theoretically in industrial organization (Heidhues & KTszegi 2008), contract theory (Herweg et al. 2010), consumption-savings analysis (KTszegi & Rabin 2009), and other settings.”
Uncertain Demand, Consumer Loss Aversion, and Flat-Rate Tariffs (2013, background): “No dominance of loss utility is also imposed, for instance, by Herweg et al. (2010). In our setup, λ = 1 corresponds to the conventional estimate of two-to-one loss aversion.”
Regular prices and sales: Regular prices and sales (2010, unknown): “In models of moral hazard with loss-averse agents, Herweg et al. (2010) and Macera (2012) demonstrate that the optimal incentive contract features less variation in the wage than would be expected based on classical models. credible for the consumer not to buy at these prices.”
Modeling Risk Aversion in Economics (2018, background): “Herweg et al. show that, even when many different outcomes are possible, the optimal contract can in fact be a binary contract in which the agent gets a high wage if output is large enough, and otherwise gets a low wage. Intuitively, there must be at least two wage levels to generate incentives for ”