Bremzen, Andrei; Khokhlova, Elena; Suvorov, Anton; Ven, … - In: The Review of Economics and Statistics 97 (2015) 1, pp. 55-70
Psychologists and economists have argued that rewards often have hidden costs. One possible reason is that the principal may have incentives to offer higher rewards when she knows the task is difficult. Our experiment tests if high rewards embody such bad news and if this is correctly perceived...