Do individuals trained in law enforcement punish or reward differently from typical student subjects ? We analyze norm enforcement behavior of newly appointed police commissioners in both a Voluntary Contribution Mechanism game and a Common Pool Resource game. Our experimental design includes...

The Peter Principle states that, after a promotion, the observed output of promoted employees tends to fall. Lazear (2004) models this principle as resulting from a regression to the mean of the transitory component of ability. Our experiment reproduces this model in the laboratory by means of...

Agency theory assumes that tighter monitoring by the principal should motivate the agent to raise his effort level whereas the “crowding-out” literature suggests that it may reduce the overall work effort. These two assertions are not necessarily contradictory provided that the nature of the...

Agency theory assumes that tighter monitoring by the principal should motivate the agent to raise his effort level whereas the “crowding-out” literature suggests that it may reduce the overall work effort. These two assertions are not necessarily contradictory provided that the nature of the...

An important issue in personnel economics is the design of efficient job allocation rules. Firms often use promotions both to sort workers across jobs and to provide them with incentives. However, the Peter Principle states that employees' output tends to fall after a promotion. Lazear (2004)...

Agency theory assumes that tighter monitoring by the principal should motivate agents to increase their effort, whereas the "crowding-out" literature suggests that the opposite may occur. These two assertions are not necessarily contradictory provided that the nature of the employment...

A demand for behavioral norms arises when members of a group have individual incentives to take actions that reduce the group's overall welfare (James S. Coleman, 1990). Norms require enforcement with a system of sanctions that penalize deviations from acceptable behavior (George C. Homans,...

The authors test the hypothesis that individual effort on the job depends both on one's own income and on the individual's position in the relevant income distribution. Combining experimental evidence from a gift-exchange game with multi-country ISSP survey data, they analyze the extent to which...

Cooperation among people who are not related to each other is sustained by the availability of punishment devices which help enforce social norms (Fehr and Gächter, 2002). However, the rationale for costly punishment remains unclear. This paper reports the results of an experiment investigating...

This paper combines ISSP survey data and experimental evidence from a gift-exchange game to determine the effect of status or relative income on work effort. We find a strong effect of others' incomes on individual effort decisions in both datasets. The individual's rank in the income...