【正文】 m to align the principal and agent’s goalsan example ?Repairperson’s goal is to maximize wage of cost ? Cost = 0 for low effort ? Cost = $10,000 for high effort ? w(R) = repairperson wage based only on output 67 Chapter 1 The PrincipalAgent Problem ? Incentives in the PrincipalAgent Framework ? Choosing a Wage ?w = 0。 a = 0。 R = $15,000 ?R = $10,000 or $20,000, w = 0 ?R = $40,000。 w = $24,000 ? R = $30,000。 Profit = $18,000 ? Net wage = $2,000 68 Chapter 1 The PrincipalAgent Problem ? Incentives in the PrincipalAgent Framework ? Choosing a Wage ?w = R $18,000 ? Net wage = $2,000 ? High effort 69 Chapter 1 The PrincipalAgent Problem ? Conclusion ? Incentive structure that rewards the oute of high levels of effort can induce agents to aim for the goals set by the principals. 70 Chapter 1 The PrincipalAgent Problem ? Asymmetric Information and Incentive Design in the Integrated Firm ? In integrated firms, division managers have better (asymmetric) information about production than central management 71 Chapter 1 The PrincipalAgent Problem ? Asymmetric Information and Incentive Design in the Integrated Firm ? Two Issues ?How can central management illicit accurate information ?How can central management achieve efficient divisional production 72 Chapter 1 The PrincipalAgent Problem ? Possible Incentive Plans ? Bonus based on output or profit ?Will this plan provide an incentive for accurate information? 73 Chapter 1 The PrincipalAgent Problem ? Possible Incentive Plans ? Bonus based on how close the managers get to their forecasts of output and profits ? Qf = estimate of feasible production level ? B = bonus in dollars ? Q = actual output ? B = 10,000 .5(Qf Q) ? Incentive to underestimate Qf 74 Chapter 1 The PrincipalAgent Problem ? Possible Incentive Plans ? Bonus still tied to accuracy of forecast ?If Q Qf 。B = .3Qf + .2(Q Qf) ?If Q Qf 。B = .3Qf .5(Qf Q) 75 Chapter 1 Incentive Design in an Integrated Firm Output (units per year) 2,000 4,000 6,000 10,000 0 10,000 20,000 30,000 40,000 Bonus ($ per year) 8,000 If Qf = 30,000, bonus is $6,000, the maximum amount possible. Qf = 30,000 Qf = 10,000 If Qf = 10,000, bonus is $5,000 Qf = 20,000 If Qf = 20,000, bonus is $4,000 76 Chapter 1 Asymmetric Information in Labor Markets: Efficiency Wage Theory ? In a petitive labor market, all who wish to work will find jobs for a wage equal to their marginal product. ?However, most countries’ economies experience unemployment. 77 Chapter 1 ? The efficiency wage theory can explain the presence of unemployment and wage discrimination. ? In developing countries, productivity depends on the wage rate for nutritional reasons. Asymmetric Information in Labor Markets: Efficiency Wage Theory 78 Chapter 1 ? The shirking model can be better used to explain unemployment and wage discrimination in the United States. ? Assumes perfectly petitive markets ? However, workers can work or shirk. ? Since performance information is limited, workers may not get fired. Asymmetric Information in Labor Markets: Efficiency Wage Theory 79 Chapter 1 Without shirking, the market wage is w*, and fullemployment exists at L* Demand for Labor w* L* SL Unemployment in a Shirking Model Quantity of Labor Wage NoShirking Constraint The noshirking constraint gives the wage necessary to keep workers from shirking. we Le At the equilibrium wage, We the firm hires Le workers creating unemployment of L* Le. 80 Chapter 1 Efficiency Wages at Ford Motor Company ? Labor turnover at Ford ? 1913: 380% ? 1914: 1000% ?Average pay = $2 $3 ?Ford increased pay to $5 81 Chapter 1 Efficiency Wages at Ford Motor Company ? Results ? Productivity increased 51% ? Absenteeism had been halved ? Profitability rose from $30 million in 1914 to $60 million in 1916. 82 Chapter 1 Summary ? Asymmetric information creates a market failure in which bad products tend to drive good products out of the market. ? Insurance markets frequently involve asymmetric information because the insuring party has better information about the risk involved than the insurance pany. 83 Chapter 1 Summary ? Asymmetric information may make it costly for the owners of firms to monitor accurately the behavior of the firm’s manager. ? Asymmetric information can explain why labor markets have substantial unemployment when some workers are actively seeking work. 84 Chapter 1 End of Lecture 15 Markets with Asymmetric Information 85 Chapter 1 演講完畢，謝謝觀看！