- Path:
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Delegated Contracting, Wage Compression, and Quiet Quitting
Files
Periodical
- Title:
- The B.E. journal of theoretical economics
- Publication:
-
Berlin Boston, Mass.: De Gruyter
- Note:
- Gesehen am 04.12.20
- C!URL-Ä(06-02-12);C:auf der Degruyter-Seite werden bei den früheren Jg. (1.2001ff) die Artikel der darin aufgegangenen Zeitschriften aufgeführt, daher wurde der ev obiger Veröffentlichung nicht auf 1.2001 zurückdatiert;355!URL-Ä(04-12-20)
- Scope:
- Online-Ressource
- ISSN:
- 1935-1704
- ZDB-ID:
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2268339-2
- VÖBB-Katalog:
- 35340968
- Keywords:
- Zeitschrift
- Classification:
- Sozialwissenschaften
- Wirtschaft
- Technik
- Collection:
- Sozialwissenschaften
- Wirtschaft
- Technik
- Copyright:
- Rights reserved
- Accessibility:
- Eingeschränkter Zugang mit Nutzungsbeschränkungen
- Title:
- The B.E. journal of theoretical economics
- Publication:
-
Berlin Boston, Mass.: De Gruyter
- Note:
- Gesehen am 04.12.20
- C!URL-Ä(06-02-12);C:auf der Degruyter-Seite werden bei den früheren Jg. (1.2001ff) die Artikel der darin aufgegangenen Zeitschriften aufgeführt, daher wurde der ev obiger Veröffentlichung nicht auf 1.2001 zurückdatiert;355!URL-Ä(04-12-20)
- Scope:
- Online-Ressource
- ISSN:
- 1935-1704
- ZDB-ID:
-
2268339-2
- VÖBB-Katalog:
- 35340968
- Keywords:
- Zeitschrift
- Classification:
- Sozialwissenschaften
- Wirtschaft
- Technik
- Collection:
- Sozialwissenschaften
- Wirtschaft
- Technik
- Copyright:
- Rights reserved
- Accessibility:
- Eingeschränkter Zugang mit Nutzungsbeschränkungen
Article
- Title:
- Delegated Contracting, Wage Compression, and Quiet Quitting
- Publication:
-
Berlin Boston, Mass.: De Gruyter, 2026
- Language:
- English
- Information:
- Abstract: We argue that delegated contracting and transfer pricing can form a set of conditions leading to coarse pay incentives. The allocation mechanism of negotiated transfer pricing creates asymmetry in the intrafirm valuation of employee effort. For a divisional manager, the value of effort is determined by the transfer price but for the center by the contribution to firm profits with the transfer price coming as a cost. Divisional managers’ incentives become misaligned with firm profit maximization, which has implications for employees’ compensation. We demonstrate the optimality of payroll cost controls imposed on divisional managers despite that managers respond by compressing employees’ wages and that employees respond by quiet quitting. We also consider an extension of the model where negotiated transfer pricing can create more distortion in larger firms. Differences in managerial incentives across small and large firms produce the firm-size wage effects: a higher average wage but less wage variation in larger firms.
- Scope:
- Online-Ressource
- Note:
- Open Access
- Archivierung/Langzeitarchivierung gewährleistet
- Keywords:
- delegated contracting ; wage compression ; quiet quitting ; cost controls ; performance evaluation ; firm-size wage effects ; D21 ; J30 ; C70
- Classification:
- Sozialwissenschaften
- Technik
- Wirtschaft
- DDC Group:
- 330 Wirtschaft
- Collection:
- Sozialwissenschaften
- Technik
- Wirtschaft
- Copyright:
- CC BY
- Accessibility:
- Free Access
- Title:
- Delegated Contracting, Wage Compression, and Quiet Quitting
- Publication:
-
Berlin Boston, Mass.: De Gruyter, 2026
- Language:
- English
- Information:
- Abstract: We argue that delegated contracting and transfer pricing can form a set of conditions leading to coarse pay incentives. The allocation mechanism of negotiated transfer pricing creates asymmetry in the intrafirm valuation of employee effort. For a divisional manager, the value of effort is determined by the transfer price but for the center by the contribution to firm profits with the transfer price coming as a cost. Divisional managers’ incentives become misaligned with firm profit maximization, which has implications for employees’ compensation. We demonstrate the optimality of payroll cost controls imposed on divisional managers despite that managers respond by compressing employees’ wages and that employees respond by quiet quitting. We also consider an extension of the model where negotiated transfer pricing can create more distortion in larger firms. Differences in managerial incentives across small and large firms produce the firm-size wage effects: a higher average wage but less wage variation in larger firms.
- Scope:
- Online-Ressource
- Note:
- Open Access
- Archivierung/Langzeitarchivierung gewährleistet
- Keywords:
- delegated contracting ; wage compression ; quiet quitting ; cost controls ; performance evaluation ; firm-size wage effects ; D21 ; J30 ; C70
- Classification:
- Sozialwissenschaften
- Technik
- Wirtschaft
- DDC Group:
- 330 Wirtschaft
- Collection:
- Sozialwissenschaften
- Technik
- Wirtschaft
- Copyright:
- CC BY
- Accessibility:
- Free Access
