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Falk, Armin; Kosfeld, Michael - 2021

We show experimentally that a principal's distrust in the voluntary performance of an agent has a negative impact on … the agent's motivation to perform well. Before the agent chooses his performance, the principal in our experiment decides … opportunistically. We find that most principals in our experiment do not restrict the agent's choice set but trust that the agent will …

Persistent link: https://www.econbiz.de/10013319211

Legitimacy of control

Schnedler, Wendelin; Vadovic, Radovan - 2007

What is the motivational effect of imposing a minimum effort require- ment? Agents may no longer exert voluntary effort but merely meet the requirement. Here, we examine how such hidden costs of control change when control is considered legitimate. We study a principal- agent model where control...

Persistent link: https://www.econbiz.de/10003592848

Playing "hard to get": an economic rationale for crowding out of intrinsically motivated behavior

Schnedler, Wendelin; Vanberg, Christoph - 2014

it becomes scarce. In the second, restraint serves to conceal the actor's intrinsic motivation. In both cases, not …

Persistent link: https://www.econbiz.de/10010362185

Playing "hard to get" : an economic rationale for crowding out of intrinsically motivated behavior

Schnedler, Wendelin; Vanberg, Christoph - 2014

it becomes scarce. In the second, restraint serves to conceal the actor's intrinsic motivation. In both cases, not …

Persistent link: https://www.econbiz.de/10010345273

Fairness and contract design

Fehr, Ernst; Klein, Alexander; Schmidt, Klaus M. - 2005 - This version: November 5, 2005

trust contracts that pay a generous wage upfront are less efficient than incentive contracts. The principals understand this …

Persistent link: https://www.econbiz.de/10010371080

Relative performance pay in the shadow of crisis

Kräkel, Matthias; Nieken, Petra - 2013

We analyze whether incentives from relative performance pay are reduced or enhanced if a department is possibly terminated due to a crisis. Our benchmark model shows that incentives decrease in a severe crisis, but are boosted given a minor crisis since efforts are strategic complements in the...

Persistent link: https://www.econbiz.de/10010198988

Incentives and Anonymity Principle : Crowding Out Toward Users

Crifo, Patricia; Rullière, Jean-Louis - 2021

In our model, an agent produces an outcome by a costly effort and then distributes it among heterogeneous users. The agent's payoff is the weighted sum of the users' shares and the coefficient reflecting their heterogeneity. When the agent neglects users' heterogeneity the game leads to an...

Persistent link: https://www.econbiz.de/10013318907

Adding a stick to the carrot? : the interaction of bonuses and fines

Fehr, Ernst; Schmidt, Klaus M. - 2007

In this paper we report on a principal-agent experiment where the principal can choose whether to rely on an unenforcable bonus contract or to combine the bonus contract with a fine if the agent's effort falls below a minimum standard. We show that most principals do not use the fine and that...

Persistent link: https://www.econbiz.de/10010365854

Fairness and the optimal allocation of ownership rights

Fehr, Ernst; Kremhelmer, Susanne; Schmidt, Klaus M. - 2004 - This version: July 9, 2004

We report on several experiments on the optimal allocation of ownership rights. The experiments confirm the property rights approach by showing that the ownership structure affects relationship-specific investments and that the subjects achieve the most efficient ownership allocation starting...

Persistent link: https://www.econbiz.de/10010365912

Fairness, incentives and contractual incompleteness

Fehr, Ernst; Klein, Alexander; Schmidt, Klaus M. - 2001

We show that concerns for fairness may have dramatic consequences for the optimal provision of incentives in a moral hazard context. Incentive contracts that are optimal when there are only selfish actors become inferior when some agents are concerned about fairness. Conversely, contracts that...

Persistent link: https://www.econbiz.de/10011398105