International Journal of Business and Economics Volume 11, No. 1 June, 2012

Evaluate the Effectiveness of Manager Compensation

Cheng-Feng Cheng

Department of International Business, Asia University, Taiwan

Abstract

This study develops a conceptual model for compensation from firm and manager perspectives. We identify the negotiating range for a compensation plan and adopt a dynamic bargaining game to optimize the equilibrium of base salary and bonus.

Keywords：game theory, optimization, compensation, negotiation, risk analysis.

JEL Classifications：C73, J33, M12.

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