The paper investigates the effect of four differently framed payment contracts on the agent's effort provision and performance in a real effort experiment. The four incentive payments are framed as a base wage and bonuses (one immediately pays bonuses, the other only after an initial...

We provide a hidden-action principal-agent model where the agent has referencedependent preferences. The loss-averse agent considers the base wage as reference point, and bonuses and/or penalties as gains and losses, respectively. When choosing optimal payments, the principal strategically sets...

This paper experimentally analyzes how consumers decide between entering a fixed price, an ascending auction or a BIN auction. We find that such entry decisions depend both on potential payoffs (price aspects) and consumer characteristics (non-price aspects). For values smaller than or equal to...

Horn’s rule says that messages can be kept ambiguous if only a single interpretation is plausible. Speakers only perform costly disambiguation to convey surprising information. This paper shows that, while noncooperative game theory cannot justify Horn’s rule, evolutionary game...

Let a consumer consume two goods, and let good 1 be a Giffen good. Then a wellknown necessary condition for such behaviour is that good 1 is an inferior good. This paper shows that an additional necessary for such behaviour is that good 1 is a gross substitute for good 2, and that good 2 is a...

This paper presents a game-theoretic rationale for the beneficial effect of a common enemy on cooperation. In a defence game against a common natural threat, the value of the public good of defence is equal to the sum of the players’ defensive efforts. The game therefore takes the form of...

In this paper we seek to contribute to the literature on competition and innovation by focusing on individual firms within the U.S. banking industry in the period 1984-2004. We measure innovation by estimating technology gaps and find evidence of an inverted-U relationship between competition...

Although works councils have, by and large, equally extensive legal rights in Germany and the Netherlands, this is the first econometric analysis that investigates the influence of Dutch works councils on firm performance. We use a nation-wide Dutch dataset with information on...