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Tag Archives: pay-for-performance

One of the main topics in organizational economics (and…

One of the main topics in organizational economics (and economics in general I suppose) is the principal-agent problem- i.e. the misalignment of incentives between one party and another party enlisted to do the first party’s bidding. For example, a small-business owner hires an employee to run things and maximize profit for the owner, but a self-interested employee who is paid a fixed salary would likely rather check Facebook then do whatever it is that would be in the owner’s best interest....

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