We develop a principal–agent model with a moral hazard problem in which the principal has access to a hard signal (the level of output) and a soft behavioral signal (the supervision signal) about the agent's level of effort. In our model, the agent can initiate influence activities and...

Abstract We study team formation in real-effort experiments in which participants bargain over a jointly produced outcome. Participants decide between undertaking a task alone or with another participant by releasing the minimum share of the future team outcome that they are willing to accept....

Financial markets are overwhelmed by daily announcements. We use experimental asset markets to assess the impact of releasing public messages with different levels of reliability on asset prices. Subjects receive qualitative announcements in predetermined trading periods that are either preset...