Incentive Design under Loss Aversion
在损失厌恶假设下分析最优薪酬合同，发现薪酬常对业绩不敏感，且多用奖励而非惩罚，尤其在风险厌恶低且参照收入内生时，限制损失（如期权）还能抑制高管冒险行为。
Compensation schemes often reward success but do not penalize failure. Fixed salaries with stock options or bonuses have this feature. Yet the standard principal–agent model implies that pay is normally monotonically increasing in performance. This paper shows that, under loss aversion, there will be intervals over which pay is insensitive to performance, with the use of carrots but not sticks is frequently optimal, especially when risk aversion is low and reference income is endogenous. A further benefit of capping losses, for example through options, is to discourage reckless behavior by executives seeking to resurrect their fortunes.