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On Inequity Aversion - A Reply to Binmore and Shaked

Fehr, Ernst; Schmidt, Klaus M. - 2009

In this paper we reply to Binmore and Shaked's criticism of the Fehr-Schmidt model of inequity aversion. We put the theory and their arguments into perspective and show that their criticism is not substantiated. Finally, we briefly comment on the main challenges for future research on social...

Persistent link: https://www.econbiz.de/10010333922

Why and How Identity Should Influence Utility

Wichardt, Philipp C. - 2007

This paper provides an argument for the advantage of a preference for identity-consistent behaviour from an evolutionary point of view. Within a stylised model of social interaction, we show that the development of cooperative social norms is greatly facilitated if the agents of the society...

Persistent link: https://www.econbiz.de/10010333957

The Role of Experiments for the Development of Economic Theories

Schmidt, Klaus M. - 2009

Economic experiments interact with economic theories in various ways. First of all they are used to test economic … applicability, the robustness and the predictive power of a theory. Furthermore, economic experiments discover and isolate phenomena … and challenge economic theorists to explain them. Finally, many economic experiments are 'material' models. They are used …

Persistent link: https://www.econbiz.de/10010334065

How does socio-economic status shape a child's personality?

Deckers, Thomas; Falk, Armin; Kosse, Fabian; … - 2015

We show that socio-economic status (SES) is a powerful predictor of many facets of a child's personality. The facets of personality we investigate encompass time preferences, risk preferences, and altruism, as well as crystallized and fluid IQ. We measure a family's SES by the mother's and...

Persistent link: https://www.econbiz.de/10011350847

Incentives, Reputation and the Allocation of Authority

Englmaier, Florian; Filipi, Ales; Singh, Ravi - 2010

We address the question how much authority a principal should delegate to a manager with conflicting interests and uncertain ability in a context in which the manager has both compensationbased and reputational incentives. The optimal level of authority balances the value of the manager's...

Persistent link: https://www.econbiz.de/10010333720

Authority and Incentives in Organizations

Kräkel, Matthias - 2013

The paper analyzes the choice of organizational structure as solution to the trade-off between controlling behavior based on authority rights and minimizing costs for implementing high efforts. The analysis includes the owner of a firm, a top manager and two division heads. If it is more...

Persistent link: https://www.econbiz.de/10010333761

Tournaments with Gaps

Imhof, Lorens; Kräkel, Matthias - 2013

A standard tournament contract specifies only tournament prizes. If agents' performance is measured on a cardinal scale, the principal can complement the tournament contract by a gap which defines the minimum distance by which the best performing agent must beat the second best to receive the...

Persistent link: https://www.econbiz.de/10010333779

Incomplete Contracting, Renegotiation, and Expectation-Based Loss Aversion

Herweg, Fabian; Karle, Heiko; Müller, Daniel - 2014

We consider a simple trading relationship between an expectation-based loss-averse buyer and profit-maximizing sellers. When writing a long-term contract the parties have to rely on renegotiations in order to ensure materially efficient trade ex post. The type of the concluded long-term contract...

Persistent link: https://www.econbiz.de/10010333798

Screening, Competition, and Job Design Economic Origins of Good Jobs

Bartling, Björn; Fehr, Ernst; Schmidt, Klaus M. - 2009

Persistent link: https://www.econbiz.de/10010333812

Reference Points in Renegotiations: The Role of Contracts and Competition

Bartling, Björn; Schmidt, Klaus M. - 2012

Several recent papers argue that contracts provide reference points that affect ex post behavior. We test this hypothesis in a canonical buyer-seller relationship with renegotiation. Our paper provides causal experimental evidence that an initial contract has a highly significant and...

Persistent link: https://www.econbiz.de/10010333816