Commitment and Discretion in Contracts: Theory and Evidence from Retirement Plans

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Standard

Commitment and Discretion in Contracts: Theory and Evidence from Retirement Plans. / Hyuk-Kim, Jin; Vikander, Nick.

I: Scandinavian Journal of Economics, Bind 125, Nr. 2, 2023, s. 461-488.

Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt

Harvard

Hyuk-Kim, J & Vikander, N 2023, 'Commitment and Discretion in Contracts: Theory and Evidence from Retirement Plans', Scandinavian Journal of Economics, bind 125, nr. 2, s. 461-488. https://doi.org/10.1111/sjoe.12523

APA

Hyuk-Kim, J., & Vikander, N. (2023). Commitment and Discretion in Contracts: Theory and Evidence from Retirement Plans. Scandinavian Journal of Economics, 125(2), 461-488. https://doi.org/10.1111/sjoe.12523

Vancouver

Hyuk-Kim J, Vikander N. Commitment and Discretion in Contracts: Theory and Evidence from Retirement Plans. Scandinavian Journal of Economics. 2023;125(2):461-488. https://doi.org/10.1111/sjoe.12523

Author

Hyuk-Kim, Jin ; Vikander, Nick. / Commitment and Discretion in Contracts: Theory and Evidence from Retirement Plans. I: Scandinavian Journal of Economics. 2023 ; Bind 125, Nr. 2. s. 461-488.

Bibtex

@article{eaa02201efeb48da85cece6f70026ff8,
title = "Commitment and Discretion in Contracts: Theory and Evidence from Retirement Plans",
abstract = "We consider a firm{\textquoteright}s problem of incentivizing its workforce through relational contracts, when workers effectively face a shorter time horizon due to possible separation shocks. Commitment issues then generate a trade-off between efficiency and distribution, which affects both performance and profits. Profits under relational contracting can exceed those under formal contracting, despite lower performance, when discounting is moderate, firm bargaining power is weak, and shocks are likely. Using a matched employer-retirement plan dataset, and interpreting discretionary profit-sharing plans and employee stock ownership plans as relational and formal contracting, respectively, we find some support for our predictions.",
author = "Jin Hyuk-Kim and Nick Vikander",
year = "2023",
doi = "10.1111/sjoe.12523",
language = "English",
volume = "125",
pages = "461--488",
journal = "Scandinavian Journal of Economics",
issn = "0347-0520",
publisher = "Wiley-Blackwell",
number = "2",

}

RIS

TY - JOUR

T1 - Commitment and Discretion in Contracts: Theory and Evidence from Retirement Plans

AU - Hyuk-Kim, Jin

AU - Vikander, Nick

PY - 2023

Y1 - 2023

N2 - We consider a firm’s problem of incentivizing its workforce through relational contracts, when workers effectively face a shorter time horizon due to possible separation shocks. Commitment issues then generate a trade-off between efficiency and distribution, which affects both performance and profits. Profits under relational contracting can exceed those under formal contracting, despite lower performance, when discounting is moderate, firm bargaining power is weak, and shocks are likely. Using a matched employer-retirement plan dataset, and interpreting discretionary profit-sharing plans and employee stock ownership plans as relational and formal contracting, respectively, we find some support for our predictions.

AB - We consider a firm’s problem of incentivizing its workforce through relational contracts, when workers effectively face a shorter time horizon due to possible separation shocks. Commitment issues then generate a trade-off between efficiency and distribution, which affects both performance and profits. Profits under relational contracting can exceed those under formal contracting, despite lower performance, when discounting is moderate, firm bargaining power is weak, and shocks are likely. Using a matched employer-retirement plan dataset, and interpreting discretionary profit-sharing plans and employee stock ownership plans as relational and formal contracting, respectively, we find some support for our predictions.

U2 - 10.1111/sjoe.12523

DO - 10.1111/sjoe.12523

M3 - Journal article

VL - 125

SP - 461

EP - 488

JO - Scandinavian Journal of Economics

JF - Scandinavian Journal of Economics

SN - 0347-0520

IS - 2

ER -

ID: 319231379