Abstract
This article provides an overview of recent advances in theoretical and empirical work on incentive contracting in firms. The specific focus is on a variety of reasons why the prediction of the early literature on contracting –suggesting a strong relationship between performance and pay – has not been borne out.
This chapter was originally published in The New Palgrave Dictionary of Economics, 2nd edition, 2008. Edited by Steven N. Durlauf and Lawrence E. Blume
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Prendergast, C. (2008). Contracting in Firms. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_2101-1
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DOI: https://doi.org/10.1057/978-1-349-95121-5_2101-1
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Publisher Name: Palgrave Macmillan, London
Online ISBN: 978-1-349-95121-5
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