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The Generalized Informativeness Principle

Chaigneau, Pierre; Edmans, Alex; Gottlieb, Daniel - C.E.P.R. Discussion Papers - 2014

This paper shows that the informativeness principle, as originally formulated by Holmstrom (1979), does not hold if the first-order approach is invalid. We introduce a "generalized informativeness principle" that takes into account non-local incentive constraints and holds generically, even...

Persistent link: https://www.econbiz.de/10011096100

The Informativeness Principle Under Limited Liability

Chaigneau, Pierre; Edmans, Alex; Gottlieb, Daniel - C.E.P.R. Discussion Papers - 2014

This paper shows that the informativeness principle does not automatically extend to settings with limited liability. Even if a signal is informative about effort, it may have no value for contracting. An agent with limited liability is paid zero for certain output realizations. Thus, even if...

Persistent link: https://www.econbiz.de/10011083536

The Value of Informativeness for Contracting

Chaigneau, Pierre; Edmans, Alex; Gottlieb, Daniel - C.E.P.R. Discussion Papers - 2014

The informativeness principle demonstrates qualitative benefits to increasing signal precision. However, it is difficult to quantify these benefits -- and compare them against the costs of precision -- since we typically cannot solve for the optimal contract and analyze how it changes with...

Persistent link: https://www.econbiz.de/10011083624

Fairness, Incentives and Contractual Incompleteness

Fehr, Ernst; Klein, Alexander; Schmidt, Klaus M. - C.E.P.R. Discussion Papers - 2001

of a series of experiments. Furthermore, our results suggest that the existence of fair actors may be an important reason …

Persistent link: https://www.econbiz.de/10005792499

Hey Look at Me: The Effect of Giving Circles on Giving

Karlan, Dean S.; McConnell, Margaret - C.E.P.R. Discussion Papers - 2012

Theories abound for why individuals give to charity. We conduct a field experiment with donors to a Yale University service club to test the impact of a promise of public recognition on giving. Some may claim that they respond to an offer of public recognition not to improve their social...

Persistent link: https://www.econbiz.de/10011084285

Theories of Fairness and Reciprocity - Evidence and Economic Applications

Fehr, Ernst; Schmidt, Klaus M. - C.E.P.R. Discussion Papers - 2001

Most economic models are based on the self-interest hypothesis that assumes that all people are exclusively motivated by their material self-interest. In recent years experimental economists have gathered overwhelming evidence that systematically refutes the self-interest hypothesis and suggests...

Persistent link: https://www.econbiz.de/10005656392

An Experimental Study of Storable Votes

Casella, Alessandra; Gelman, Andrew; Palfrey, Thomas R - C.E.P.R. Discussion Papers - 2003

implementation. In our experiments, realized efficiency levels were remarkably close to theoretical equilibrium predictions, while …

Persistent link: https://www.econbiz.de/10005662312

Knowing What Works. The Case for Rigorous Programme Evaluation

Schmidt, Christoph M - C.E.P.R. Discussion Papers - 2001

problem. It introduces several approaches, based on both experiments and on non-experimental data that have been proposed in …

Persistent link: https://www.econbiz.de/10005788972

Did We Overestimate the Role of Social Preferences? The Case of Self-Selected Student Samples

Falk, Armin; Meier, Stephan; Zehnder, Christian - C.E.P.R. Discussion Papers - 2010

phenomena. However, the empirical foundation of social preferences is largely based on laboratory experiments with self …-selected students as participants. This is potentially problematic as students participating in experiments may behave systematically … experiments with student samples misrepresent the importance of social preferences. Our first study shows that students who …

Persistent link: https://www.econbiz.de/10008642878

Fairness and Incentives in a Multi-Task Principle-Agent Model

Fehr, Ernst; Schmidt, Klaus M. - C.E.P.R. Discussion Papers - 2004

This Paper reports on a two-task principal-agent experiment in which only one task is contractible. The principal can either offer a piece-rate contract or a (voluntary) bonus to the agent. Bonus contracts strongly outperform piece rate contracts. Many principals reward high efforts on both...

Persistent link: https://www.econbiz.de/10005114195