|
|
|
|
||||
|
||||
Framing Contracts - Why Loss Framing Increases EffortRichard R. W. BrooksYale University - Law School Alexander StremitzerUCLA School of Law Stephan W. TontrupMax Planck Institute for Research on Collective Goods January 23, 2012 Journal of Institutional and Theoretical Economics (JITE), 2012, 168 (1): 62-82. UCLA School of Law, Law-Econ Research Paper No. 12-05 Yale Law & Economics Research Paper No. 438 Abstract: Recent evidence from the field (Hossain and List, 2009) suggests that contracts framed in terms of a loss (a deduction is taken for failing to meet a threshold) lead to greater effort than contracts framed in terms of a gain (a bonus is given for meeting a threshold). We investigate two explanations for this framing effect in a laboratory setting. First, we find that the loss frame communicates the expectation that achieving the bonus is the default and that our subjects comply with this expectation. Second, we find evidence for an endowment effect, even though the bonus is just a monetary payment that subjects do not even have in their possession.
Number of Pages in PDF File: 28 Keywords: Contracts, Loss Framing, Experimental Law and Economics JEL Classification: K12, C91, L14, J41 working papers seriesDate posted: January 25, 2012 ; Last revised: April 1, 2013Suggested CitationContact Information
|
|
||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo1 in 0.344 seconds
