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Managerial Incentives and Heterogeneous Firms

✍ Scribed by Mei-Chiun Tseng

Book ID: 110335391
Publisher: Springer US
Year: 2002
Tongue: English
Weight: 45 KB
Volume: 18
Category: Article
ISSN: 0921-898X
DOI: 10.1023/a:1015287403244

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## Abstract Cost‐reducing investments by firms are often not publicly observable. This lack of observability would preclude a strategic use of process innovation. However, we show that an observable and verifiable contract that provides direct monetary incentives for cost reductions — an innovation