perform well voluntarily. Principals who trust induce, on average, a higher performance and hence earn higher payoffs than … principals who control. The reason is that most agents lower their performance as a response to the signal of distrust created by …We show experimentally that a principal's distrust in the voluntary performance of an agent has a negative impact on …

implement a control strategy, which consists of low effort discretion and little or no rent-sharing, or they implement a trust … control strategy prevails, while the possibility of screening renders the trust strategy profitable. The introduction of … but also leaving more opportunities for shirking. These "high-performance work systems" are difficult to understand in …

cases, trust-related active share delivers superior performance, whereas the economic magnitude is larger for cross …We hypothesize that trust plays an important role in affecting the activeness and effectiveness of the global mutual … fund industry. Empirically, trust is positively associated with the activeness of domestic funds, whereas for …

We use experiments to analyze what type of communication is most effective in achieving cooperation in a simple … collusion game. Consistent with the existing literature on communication and collusion, even minimal communication leads to a … strategies, this initial burst of collusion rapidly collapses. When unlimited pre-game communication is allowed via a chat window …

model in which all individuals currently alive vote on social security. There is no commitment to preserve the legislation …

optimal band width widens in response to a decrease in policy-makers' commitment reputation, an increase in the cost of …

under discretion or commitment, and rules that approximate optimal policy under commitment. For some reaction functions we …

the performance of an alternative trading protocol in the cheap-talk environment depends on the level of price dispersion … competing auctions and competitive search continue to hold unaltered even without ex ante price commitment. …

Directed search models are market games in which each firm announces a wage commitment to attract a worker … commitments to fill their vacancies faster, which yields constrained efficient outcomes. We show that commitment is not essential … subsequent wage-formation stage. The insights from existing commitment models extend unchanged to such a cheap-talk environment …