We consider a model in which a principal may delegate the choice of a project to a better informed agent. The preferences of the agent and the principal about which project should be undertaken may be discordant. Moreover, the agent benefits from being granted more discretion in the project...

We study an observable risk-return tradeoff for which risk "preferences" are normatively prescribed by the desire to win the game. The choice is whether to shoot a 2-pointer or a 3-pointer in professional (NBA) basketball. When trailing, teams should get more risk-loving as they fall further...

Contract law treats consumer attention as if it were unlimited. We instead view consumer attention as a scarce resource that must be conserved. We argue that consumer contracts generate negative externalities by overwhelming consumers with information that depletes their attention and prevents...

Critical contribution were made by Harvey Leibenstein to the theory of the firm through his development of efficiency wage and X-efficiency theories. Leibenstein focused and nuanced attention to incentives, individual and micro-micro motivations, and competitive pressures in determining...

We review the theoretical and empirical literature on commitment devices. A commitment device is any arrangement, entered into by an individual, with the aim of making it easier to fulfill his or her own future plans. We argue that there is growing empirical evidence supporting the proposition...

Principal-agent relationships are typically motivated by efficiency gains from comparative advantage. However, such delegation may also arise because it allows principals the pursuit of selfish outcomes while avoiding explicitly selfish behavior. We report laboratory experiments in which...

I examine incentive contracting with an agent who disagrees with the principal and creates organizational frictions when the actual performance evaluation and compensation fall short of what he thinks he should earn. Results show that seemingly rigid policies, such as long-term performance...

In this paper, I suggest a new experimental method for measuring (dis)honest information transmission. Subjects play a variant of the dictator game in which the dictator’s decision whether to lie (either to or against his advantage) or whether to be honest, when communicating private...

In this project we investigate experimentally the link between self-control and attitude towards paternalism in a principal-agent framework. This allows us to distinguish between models of costly self-control and models of time inconsistency, which often make identical predictions in other...

It is a well-known fact that people respond to incentives; however, people respond differently on how these incentives are presented. This study aims to verify whether there are significant differences among the individual, team, and mix incentive strategies through an experimental setup. The...