This thesis consists of three chapters pertaining to issues of long-term relationships in labour markets. In Chapter 1, I analyze a model of a two-period advice game. The decision maker chooses to retain or replace the advisor after the first period depending on the first period events. Even though the decision maker and the advisor have identical preferences, this potential replacement creates incentive for the advisor to avoid telling the truth. I show the condition under which the decision maker can find a random retention rule that induces a truthful report from the advisor, and I characterize an optimal retention rule that maximizes the decision maker's expected payoff. In Chapter 2, I propose a search theoretic model of optimal employment contract under repeated moral hazard. The model integrates two important attributes of the labour market: workers' work incentive on the job and their mobility in the labour market. Even though all workers and firms are ex ante homogeneous, these two factors jointly generate (1) wages and productivity that increase with worker's tenure and (2) endogenous dynamic heterogeneity of the labour productivity of the match. The interaction of these factors provides novel implications for wage dispersion, labour mobility, and the business cycle behaviour of macroeconomic variables. Lastly, in Chapter 3, I quantitatively assess wage dispersion and business cycle implications of the model developed in Chapter 2. In terms of wage dispersion, the model with on-the-job search with wage-tenure contracts seems to accommodate sizable frictional wage dispersion. The model, however, generates very small productivity difference among workers, and shows weak evidence that the productivity difference generated by the endogenous variations in incentives is responsible for frictional wage dispersion. In terms of business cycle implications, workers' endogenous effort choice first amplifies the effect of productivity shock on unemployment rate. Second, responses of workers to productivity shocks generate marked difference between the effects of temporary productivity shock and that of permanent shock. Third, the analysis shows the importance of the distributional effect on macroeconomic variables during the transitory periods after a shock.

My study investigates whether the effects of non-cash incentives on employee performance depend on when the incentive is paid and what type of task is being performed. Although firms frequently use non-cash incentives, such as merchandise, travel awards and gift cards, the effects of non-cash incentives, relative to cash incentives, are not well understood by researchers. Drawing on economic and psychology theories, I predict that the effects of incentive type (cash or non-cash) on performance depend on incentive payoff timing (near or distant future) and task type (analytic or creative). Specifically, for an analytic task, I predict and find that a cash incentive paid in the near future is most effective. For a creative task, I predict and find that a cash incentive paid in the near future and a non-cash incentive paid in the distant future are most effective. The results of my study should benefit theory and practice by identifying the most effective combination of incentive type and payoff timing for a given task type.

The purpose of this thesis is to gain a deeper understanding in the internationalization process that Swedish banks go through. This will be achieved by evaluating Nordea and SEB and their internationalization to Poland and Germany. The concept of internationalization is constantly being explored, leading to different forms of results and theories within this area of research. Nordea is one of the largest providers of financial services in the Nordic and Baltic Sea region. Nordea has a strong focus on expanding their internationalization. SEB’s biggest markets are the Nordic countries, the Baltic’s and Germany. SEB has diverse strategies and structures in the different countries that the bank operates in. The methodology for this thesis is of a deductive approach performed with qualitative and quantitative data. A case study on Nordea and SEB is performed. To complement the case study results, a CAMEL rating is conducted on Nordea and SEB to assess the risk and earnings performance on each bank and and their specific internationalization locations. Evidence from this thesis confirms that the amount of knowledge and experience put in by the bank to the location is essential for the success of internationalization. This research found Nordea’s incentives towards Poland were the higher potential in growth in emerging markets. For SEB the incentive was mainly to follow customers which confirm that SEB has a strong commitment to the home market which leads the bank to new activities. The authors found the CAMEL rating to be a valuable tool for evaluating foreign operations. The authors believe an external CAMEL rating should be assigned each parent company along with their internationalization locations. Both banks obtained very low ratings according to these measures which indicates good and solid performance with little need for supervision. Nordea and SEB are both stable banks in Sweden as well as abroad. The international operations assess a slightly higher CAMEL rating for both banks which shows that the banks have a more stable business in the domestic countries. The CAMEL rating showed that Nordea and SEB’s parent companies are well prepared for the new Basel regulations which will be implemented in 2013 while the acquisitions in Poland and Germany must make adoptions to the new set of requirements.

My study examines the relationship between principal and agent in a moral hazard setting where the principal has the ability to monitor the actions of the agent at an interim stage of the project. I show that monitoring can induce the agent to exert higher levels of effort and can result in a reallocation of project payoffs between the two parties. This reallocation is not a one-way street: Situations exist where monitoring encourages greater effort from the agent, resulting in greater project payoffs for both principal and agent. For projects that are characterized as high-risk, high-reward projects where agent involvement is costly, monitoring is often the optimal strategy; this is an explanation for why venture capital type investments are the subject of intense monitoring. When the principal can share monitoring results at an interim stage with the agent, the agent is able to modify his effort levels in certain situations for the benefit of both parties.

We analyze issues arising from demand management in decentralized decision-making environments. We consider logistics systems and supply chains, where companies' operations are handled with independent entities whose decisions affect the performance of the overall system. In the first study, we focus on a logistics system in the sea cargo industry, where demand is booked by independent sales agents, and the agents' capacity limits and sales incentives are determined by a central headquarters. We develop models for the central headquarters to analyze and optimize capacity allocation and sales incentives to improve the performance of the decentralized system. We use network flow problems to incorporate agent behavior in our models, and we link these individual problems through an overall optimization problem that determines the capacity limits. We prove a worst-case bound on the decentralized system performance and show that the choice of sales incentive impacts the performance. In the second study, we focus on supply chains in the automotive industry, where decentralization occurs as a result of the non-direct sales channels of the auto manufacturers. Auto manufacturers can affect their demand through sales promotions. We use a game theoretical model to examine the impact of retailer incentive and customer rebate promotions on the manufacturer's pricing and the retailer's ordering/sales decisions. We consider several models with different demand characteristics and information asymmetry between the manufacturer and a price discriminating retailer. We characterize the subgame-perfect Nash equilibrium decisions and determine which promotion would benefit the manufacturer under which market conditions. We find that the retailer incentives are preferred when demand is known. On the other hand, when demand is highly uncertain the manufacturer is better off with customer rebates. We extend this research by analyzing a competitive setting with two manufacturers and two retailers, where the manufacturers' promotions vary between retailer incentives and customer rebates. We find an equilibrium outcome where customer rebates reduce the competitor's profits to zero. We observe in numerical examples that the manufacturers are able to increase their sales and profits with retailer incentives, although this can be at the expense of the retailers' profits under some situations.

The retention of talents has been one of the crucial topics for enterprises. No matter how renowned the enterprise is, its employees might choose to resign. The causes or reasons of resignation could be many, either unsatisfied with current workplace or other factors, such as leadership of supervisors, job satisfaction, the recognition of incentives or motivation and so forth. Through career transition survey and the research of related thesis, we discovered that employees¡¦ job satisfaction was profoundly involved with leadership. In the meantime, employees¡¦ recognition toward motivators will influence their job satisfaction as well. From the result of questionnaire survey and analysis, we understand what motivators can motivate employees to the most and what type of leadership can make employees feel more satisfied their jobs. The samples of this research were from indirect production employees of six manufactures in Kaohsiung that were listed as top 1000 manufactures on Business Weekly magazine. 296 copies completed and returned from 350 questionnaires in total sent out. Through differential analysis, correctional analysis, regression analysis, the empirical findings of the present study are as the following: 1. The difference of job satisfaction will be occurred because of different leadership types. The positive effect from transformational leadership is stronger than from transactional leadership. 2. The difference of Job satisfaction will be resulted from employees¡¦ recognition toward incentive measures and motivation. The positive effect from internal motivation is more significant than from external motivation. 3. The tendency of resignation is heavily impacted by job satisfaction. Keywords: leadership, incentives, motivation, job satisfaction, tendency of resignation.

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Thesis (Ph. D.)--University of Texas at Austin, 1998. / Includes bibliographical references (leaves 103-104). Available also in a digital version from Dissertation Abstracts.

Thesis (Ph. D.)--University of Washington, 2002. / Vita. Includes bibliographical references (leaves 88-93).

Thesis (Ph. D.)--Oregon State University, 2003. / Typescript (photocopy). Includes bibliographical references. Also available online.