The Ratchet principle: A diagrammatic interpretation

Tikva Darvish; Nava Kahana

doi:10.1016/0147-5967(87)90097-7

The Ratchet principle: A diagrammatic interpretation

Tikva Darvish
, Nava Kahana

Bar-Ilan University

Research output: Contribution to journal › Article › peer-review

2 Scopus citations

Abstract

Using a two-period graphic model it is shown that the Soviet fixed incentive scheme does not function, even under conditions of certainty. Allowing the incentive coefficient to change over time will not necessarily induce the manager to work efficiently. Only when the target is feasible for both periods will a flexible incentive scheme function.

Original language	English
Pages (from-to)	245-249
Number of pages	5
Journal	Journal of Comparative Economics
Volume	11
Issue number	2
DOIs	https://doi.org/10.1016/0147-5967(87)90097-7
State	Published - Jun 1987

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The Ratchet principle: A diagrammatic interpretation

Abstract

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