|
|
|
|
||||
|
||||
Efficient Contracting and Fair Play in a Simple Principal-Agent ExperimentVital AnderhubHumboldt University of Berlin - Faculty of Economics Simon GächterCESifo (Center for Economic Studies and Ifo Institute for Economic Research); Institute for the Study of Labor (IZA) Manfred KönigsteinUniversity of Erfurt; Institute for the Study of Labor (IZA) October 2001 Institute for Empirical Research in Economics Working Paper No. 18 Abstract: We study behavior within a simple principal-agent experiment. Our design allows for a large class of linear contracts. Principals can offer any feasible combination of (negative) fixed wages and incentives in the form of return sharing. This great contractual flexibility allows us to study incentive compatibility simultaneously with issues of 'fair sharing' and reciprocity, which were previously found to be important. We find a high degree of incentive-compatible behavior, but also 'fair sharing' and reciprocity. In contrast to other incentive devices studied in the literature, the incentives are 'reciprocity-compatible'. Principals recognize the agency problem and react accordingly.
Number of Pages in PDF File: 42 Keywords: Principal-agent theory, contract theory, fair sharing, incentive contracts, reciprocity, experiments JEL Classification: J33, J41, L14, C91 working papers seriesDate posted: February 20, 2000Suggested CitationContact Information
|
|
|||||||||||||||||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo2 in 0.641 seconds
