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Conference Paper: Commission sharing among agents

TitleCommission sharing among agents
Authors
Issue Date2009
Citation
2009 Far East and South Asia Meeting of the Econometrics Society (FESAMES 2009), Tokyo, Japan, 3-5 August 2009. How to Cite?
AbstractWhen a principal hires an agent to do searching, she needs to motivate the agent to pay effort as well as to deliver a suitable result. Since different principals have different taste and the suitability of the search result is not entirely determined by the agents' effort, there is an opportunity for agents to cooperate among themselves and use commission sharing to match search results to principals. This paper studies how such fee-sharing arrangement affects the agents' incentive when exerting effort and principals' incentive when offering contracts. I show that principals would offer contracts with lower piece-rates and the agents would exert lower effort in searching when such arrangement is possible. However, efficiency may increase because the search results would be better matched to the principals.
Persistent Identifierhttp://hdl.handle.net/10722/130273

 

DC FieldValueLanguage
dc.contributor.authorXu, Zen_US
dc.date.accessioned2010-12-23T08:48:40Z-
dc.date.available2010-12-23T08:48:40Z-
dc.date.issued2009en_US
dc.identifier.citation2009 Far East and South Asia Meeting of the Econometrics Society (FESAMES 2009), Tokyo, Japan, 3-5 August 2009.en_US
dc.identifier.urihttp://hdl.handle.net/10722/130273-
dc.description.abstractWhen a principal hires an agent to do searching, she needs to motivate the agent to pay effort as well as to deliver a suitable result. Since different principals have different taste and the suitability of the search result is not entirely determined by the agents' effort, there is an opportunity for agents to cooperate among themselves and use commission sharing to match search results to principals. This paper studies how such fee-sharing arrangement affects the agents' incentive when exerting effort and principals' incentive when offering contracts. I show that principals would offer contracts with lower piece-rates and the agents would exert lower effort in searching when such arrangement is possible. However, efficiency may increase because the search results would be better matched to the principals.-
dc.languageengen_US
dc.relation.ispartofFESAMES 2009-
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.titleCommission sharing among agentsen_US
dc.typeConference_Paperen_US
dc.identifier.emailXu, Z: zfxu@hku.hken_US
dc.description.naturepostprint-
dc.identifier.hkuros178148en_US

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