Huffman, David; Pierce, Lamar; Rees-Jones, Alex; Reyes, … - 2026
We examine a choice between bonus contracts offered to dealers of a U.S. auto manufacturer. In our data, dealers select the non-profit-maximizing option in 20 percent of observations, costing the mistaken dealers $18,453 per year on average. We examine how the propensity to make this mistake...