Fairness, envy, guilt and greed: building equity considerations into agency theory

Pepper, Alexander ORCID: 0000-0003-4927-809X, Gosling, Tom and Gore, Julie (2015) Fairness, envy, guilt and greed: building equity considerations into agency theory. Human Relations, 68 (8). pp. 1291-1314. ISSN 0018-7267

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Abstract

In this article we examine the extent to which fairness considerations are salient to senior executives, and consider the implications for agency theory, tournament theory and the design of top-management incentives. We look for patterns in a unique data set of senior executive preferences and seek explanations for these patterns using a model of fairness first advanced by Fehr and Schmidt in 1999. We propose a number of amendments to Fehr and Schmidt’s model. We challenge some of the standard tenets of agency theory and tournament theory, demonstrating why equity considerations should be taken into account. We add to the growing literature on behavioural agency theory.

Item Type:	Article
Official URL:	http://hum.sagepub.com/
Additional Information:	© 2015 The Authors
Divisions:	LSE
Subjects:	H Social Sciences > H Social Sciences (General)
Date Deposited:	11 Aug 2015 13:53
Last Modified:	12 Dec 2024 00:55
URI:	http://eprints.lse.ac.uk/id/eprint/63078

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