This paper uses a series of experiments with commercial bank loan officers to test the effect of performance incentives on risk-assessment and lending decisions. We first show that, while high-powered incentives lead to greater screening effort and more profitable lending, their power is muted...

We conduct an experiment with commercial bank loan officers to test how performance compensation affects risk-assessment and lending. High-powered incentives lead to greater screening effort and more profitable lending decisions. This effect is, however, muted by deferred compensation and...

Empirical studies investigating work motivation over time find people with fluctuating wages work more on days when their wage rate is lower compared to when wages are higher. The authors of these studies theorize individuals use daily income goals and stop working once they reach their goal....

We examine a repeated interaction between an agent, who undertakes experiments, and a principal who provides the requisite funding for these experiments. The agent's actions are hidden, and the principal, who makes the offers, cannot commit to future actions. We identify the unique Markovian...

We empirically study how to seed products in a network in the presence of peer effects from both friends and strangers. The product adoption decisions of friends and strangers can both strongly influence consumers' purchase behaviour, but their importance relative to each other is unknown. We...

This article discusses various arguments, which question the effectiveness of self-regulation as an instrument to implement societally preferred environmental and social standards. (1) Under the behavioral assumptions of the neoclassical theory voluntary self-regulation is not possible, if it...

Costly competitions between economic agents are modeled as contests. Researchers use laboratory experiments to study contests and test comparative static predictions of contest theory. Commonly, researchers find that participants' efforts are significantly higher than predicted by the standard...

Many economic, political and social environments can be described as contests in which agents exert costly efforts while competing over the distribution of a scarce resource. These environments have been studied using Tullock contests, all-pay auctions and rank-order tournaments. This survey...

Many fouls committed in football (called soccer in some countries) are ambiguous, and there is no objective way of determining who is the “true” perpetrator or the “true” victim. Consequently, fans as well as referees often rely on a variety of decision cues when judging such foul...

We examine a repeated interaction between an agent, who undertakes experiments, and a principal who provides the requisite funding for these experiments. The repeated interaction gives rise to a dynamic agency cost — the more lucrative is the agent's stream of future rents following a failure,...