Austrian Labor Theory and Preferences Over Compensation
Keywords:Labor Theory, Austrian Economics, Compensation, Incentives, Monetary, Non-monetary, Subjective Value, Heterogeneity
Personnel Economics has allowed us to better understand compensation schemes in face of the problems coming out of the principal-agent relationship, with individuals pursuing their own private interests making necessary a mechanism to promote the alignment of interests within the organization. The theory had to
simplify its assumptions. Austrian Economics Theory, emphasizing subjective value and entrepreneurial creativity gives a convenient background to consider individuals’ preferences over incentives.
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