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Bounded rationality in principal-agent relationships

Erlei, Mathias; Schenk-Mathes, Heike Yasmin - 2012 - Version: January 5, 2012

We conducted six treatments of a standard moral hazard experiment with hidden action. All treatments had identical Nash equilibria. However, the behavior in all treatments and periods was inconsistent with established agency theory (Nash equilibrium). In the early periods of the experiment,...

Persistent link: https://www.econbiz.de/10010481417

Price competition and reputation in markets for experience goods : an experimental study

Huck, Steffen; Lünser, Gabriele K.; Tyran, Jean-Robert - 2013

We experimentally examine the effects of price competition in markets for experience goods where sellers can build up reputations for quality. We compare price competition to monopolistic markets and markets where prices are exogenously fixed (somewhere between the endogenous oligopoly and...

Persistent link: https://www.econbiz.de/10010188722

Price competition and reputation in markets for experience goods : an experimental study

Huck, Steffen; Lünser, Gabriele K.; Tyran, Jean-Robert - 2015 - September 2013, revised March 2015

We experimentally examine the effects of price competition in markets for expe-rience goods where sellers can build up reputations for quality. We compare price competition to monopolistic markets and markets where prices are exogenously fixed (somewhere between the endogenous oligopoly and...

Persistent link: https://www.econbiz.de/10010498486

Competition Fosters Trust

Huck, Steffen; Lünser, Gabriele K.; Tyran, Jean-Robert - 2006

anonymous, such markets perform poorly: sellers are not trustworthy, and buyers do not trust sellers. If sellers are …, we find that competition, coupled with some minimal information, eliminates the trust problem almost completely …

Persistent link: https://www.econbiz.de/10014054391

The Logic of Business Groups : A Moral Hazard Perspective

Johnsen, Gudrun; Zheng, Yu - 2021

This paper offers a new perspective on why business groups are formed. Specifically, we ask if the expectation of a government bailout lowers group-affiliated firms’ cost of capital. Using a quasi-natural experiment, we show that group-affiliated firms paid lower interest when a government...

Persistent link: https://www.econbiz.de/10013313080

Pricing and Trust

Huck, Steffen; Lünser, Gabriele K.; Tyran, Jean-Robert - 2007

driven by trust. With flexible prices, we observe low prices and high quality in competitive (oligopolistic) markets, and …

Persistent link: https://www.econbiz.de/10014053130

Intermediation in a Sharing Economy : Insurance, Moral Hazard, and Rent Extraction

Weber, Thomas A. - 2017

Electronic intermediaries have become pervasive in sales transactions for many durables, such as cars, power tools, and apartments. Yet only recently have they successfully tackled the challenge of enabling parties to share such goods. A key impediment to sharing is a lender's concern about...

Persistent link: https://www.econbiz.de/10012973222

Hidden Action and Outcome Contractibility : An Experimental Test of Moral Hazard Theory

Hoppe, Eva I.; Schmitz, Patrick W. - 2019

In a laboratory experiment with 754 participants, we study the canonical one-shot moral hazard problem, comparing treatments with unobservable effort to benchmark treatments with verifiable effort. In our experiment, the players endogenously negotiate contracts. In line with contract theory, the...

Persistent link: https://www.econbiz.de/10014105234

Financial Contagion in Networks : A Market Experiment

Choi, Syngjoo - 2017

We investigate how the network structure of financial linkages and uncertainty about the location of a shock affect the likelihood of contagion and the formation of prices in a double auction market experiment. Core-periphery networks are highly susceptible to contagion and generate fire sales...

Persistent link: https://www.econbiz.de/10012953055

How weird are student samples? : lessons based on the trust game in Malawi

Holden, Stein Terje; Tione, Sarah; Tilahun, Mesfin; … - 2023

We have used the standard trust game on a random sample of university students (N=764) and a random sample of rural …¨atzle-R¨utzler, & Sutter, 2013) and how these relate to variations in trust and trustworthiness based on the standard trust game (Berg … studies of pro-social, trust, and trustworthiness behavior compared to broader population samples. Contrary to this, we found …

Persistent link: https://www.econbiz.de/10014427519