The Composition of Compensation Policy: From Cash to Fringe Benefits

Annals of Economics and Statistics, 101-102: 307-326.

Posted: 9 Mar 2008 Last revised: 11 Dec 2013

See all articles by Patricia Crifo

Patricia Crifo

Ecole Polytechnique, Paris - Laboratoire d'Econometrie; Université Paris X Nanterre - Department of Economics; Center for Interuniversity Research and Analysis on Organization (CIRANO)

Marc-Arthur Diaye

Independent

Date Written: 2011

Abstract

We develop a Principal-Agent model to analyze the optimal composition of the compensation policy with both monetary and nonmonetary incentives. We characterize nonmonetary benefits as symbols to capture a large set of non-wage compensations such as fringe benefits, status, identity (or self-image) or even sanctions. We characterize the optimal composition of the compensation policy when the Principal fully or imperfectly knows the Agent's preferences

Keywords: Fringe benefits, Non-Monetary Incentives, Perquisites

JEL Classification: M52

Suggested Citation

Crifo, Patricia and Diaye, Marc-Arthur, The Composition of Compensation Policy: From Cash to Fringe Benefits (2011). Annals of Economics and Statistics, 101-102: 307-326.. Available at SSRN: https://ssrn.com/abstract=1103115

Patricia Crifo (Contact Author)

Ecole Polytechnique, Paris - Laboratoire d'Econometrie ( email )

Route de Saclay
Palaiseau, 91128
France

Université Paris X Nanterre - Department of Economics

Nanterre Cedex, 92001
France

Center for Interuniversity Research and Analysis on Organization (CIRANO)

2020 rue University, 25th floor
Montreal H3C 3J7, Quebec
Canada

Marc-Arthur Diaye

Independent

No Address Available

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