This paper examines how the first-best models of compensation based on the agents' talents and responsibilities analyzed in some recent contributions can be extended to a second-best context. A few social criteria are proposed and... more
This paper examines how the first-best models of compensation based on the agents' talents and responsibilities analyzed in some recent contributions can be extended to a second-best context. A few social criteria are proposed and compared to alternative approaches by Roemer and Van de gaer.