Salience Bias and Overwork

نویسندگان

چکیده

In this study, we enrich a standard principal–agent model with hidden action by introducing salience-biased perception on the agent’s side. The misguided focus salient payoffs, which leads and principal’s probability assessments to diverge, has two effects: First, agent focuses too much obtaining bonus, facilitates incentive provision. Second, principal may exploit diverging relax participation. We show that salience bias can reverse nature of inefficiency arising from moral hazard; i.e., does not necessarily provide insufficient incentives result in inefficiently low effort but instead well excessive high effort.

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ژورنال

عنوان ژورنال: Games

سال: 2022

ISSN: ['2073-4336']

DOI: https://doi.org/10.3390/g13010015