Abstract
A multi-task principal-agent model is formulated to capture the effect of membership size and heterogeneity on the incentive provision of the CEO in a cooperative. An increase in membership size as well as an increase in member heterogeneity decreases the optimal incentive intensity of the CEO.
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Notes
- 1.
We assume the actions taken by the CEO only have consequences for the principal, which excludes the possibility for tunneling and the CEO directly benefiting from acting against the interests of the principal.
- 2.
We are not stating that a cooperative has no information at all about the downstream activities, but our model will focus on the impact of lacking certain information.
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Feng, L., Hendrikse, G. (2013). CEO Incentive Provision in Cooperatives: The Impact of Membership Size and Heterogeneity. In: Ehrmann, T., Windsperger, J., Cliquet, G., Hendrikse, G. (eds) Network Governance. Contributions to Management Science. Physica, Berlin, Heidelberg. https://doi.org/10.1007/978-3-7908-2867-2_10
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DOI: https://doi.org/10.1007/978-3-7908-2867-2_10
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