We study theoretically and empirically the relation between altruism preferences and incentive contract design. Theoretically, we extend Fischer and Huddart (2008) to investigate how social norms reinforce altruism preferences, thus affecting the optimal contract design related to incentive...

This paper examines a potential problem associated with the use of subjectivity in incentive contracts: Relational contracting clarity. Clarity refers to the extent to which the terms of a relational contract, or subjective assessment can be communicated and an employee and his superior are able...

The paper tries to establish for a large European car dealership whether target ratcheting and target achievements are associated with the type of contract offered to the franchisee in the dealership. We find that the franchisor sets different targets within a common stair-step incentive scheme...

This paper examines how the centralization of loan decisions affects decision making in a bank. To that end, we combine field data with a lab experiment to study how loan officers change their effort to collect and share soft information about small to medium-sized applicants when their decision...