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We explore experimentally how power asymmetries between partners affect relationship-specific investments. We find that on average players’ investments are larger than equilibrium investments. In contrast to social dilemma experiments, in our experiment preferences for social welfare and...
Persistent link: https://www.econbiz.de/10005032030
We explore experimentally how power asymmetries between partners affect relationship-specific investments. We find that on average players' investments are larger than equilibrium investments. In contrast to social dilemma experiments, in our experiment preferences for social welfare and those...
Persistent link: https://www.econbiz.de/10010332982
We present the first laboratory study showing that concerns for social welfare are key determinants of investment behavior in a world of incomplete contracting. Two equally productive players simultaneously decide how much to invest into a joint production process. The total monetary benefit...
Persistent link: https://www.econbiz.de/10005064619
We study a situation where two players first choose a sharing rule, then invest into a joint production process, and then split joint benefits. We investigate how social preferences determine investments. In our experiment we find that even the materially disadvantaged player cares more for...
Persistent link: https://www.econbiz.de/10008534038
We study a situation where two players first choose a sharing rule, then invest into a joint production process, and then split joint benefits. We investigate how social preferences determine investments. In our experiment we find that even the materially disadvantaged player cares more for...
Persistent link: https://www.econbiz.de/10003937075
Persistent link: https://www.econbiz.de/10009762369
Persistent link: https://www.econbiz.de/10010121629
We use an experiment to study the effect of ex-post sharing rules on relationship-specific investments in an incomplete contracting context. We find that no power structure can induce first-best investments and that equally productive partners reach more efficient outcomes with a balanced power...
Persistent link: https://www.econbiz.de/10010762362
We use an experiment to study the effect of ex-post sharing rules on relationship-specific investments in an incomplete contracting context. We find that no power structure can induce first-best investments and that equally productive partners reach more efficient outcomes with a balanced power...
Persistent link: https://www.econbiz.de/10010665913
Persistent link: https://www.econbiz.de/10003826400