Performance-contingent pay raises productivity, yet in the German Socio-Economic Panel (SOEP) only about 16% of workers report receiving performance pay, with the incidence being roughly seven percentage points higher among university graduates than among non-graduates. This coexistence of low...

We examine how absolute and relative gains within reward schemes influence dishonesty. In our online experiment, we vary two payoff dimensions in a cheating mind game: the payoff level and the absolute payoff difference between being successful or not. A higher payoff level has a negative impact...

This study examines the factors that influence user trust in AI-powered digital agents within organizational contexts. Employing an integrated framework that combines the Expectation Confirmation Model and the Technology Acceptance Model, we investigated how user expectations, attitudes toward...

The growing compensation disparity between CEOs and employees has become a global concern, underscoring the need for regulatory measures to ensure fair and equitable remuneration practices. Drawing insights from China's government regulation of CEO compensation (GRCC) for state-owned enterprises...

In a model of asymmetric regulation, a firm can comply with two regulatory targets, and a regulator can audit the firm for compliance. Inspection by the regulator is imperfect, and it assesses the firm’s compliance with the targets with different success probabilities. The firm fully complies...

Overconfidence is a well-established behavioral bias that involves the overestimation of one's own capabilities. We introduce a model in which managers and agents exert effort in a joint production, after the manager decides on the allocation of the tasks. A rational manager tends to reduce...

Mainstream experimental economics is characterized by its focus on theory testing and "treatment effects" on aggregate outcomes. The "agentic" alternative is concerned with the econometric specification of individual behavior. In this essay, first, a literature review of agentic experimental...

This chapter surveys economic perspectives on the separation of powers, revealing how contemporary research in political economics and the economic analysis of law conceptualize and assess institutional checks on government authority. Emphasizing principal-agent theory, it unpacks how...

Identifying what motivates public servants and how those motives vary across agencies is essential for both theory and practice, yet most existing "types of bureaucrats" remain untested against real workforces. Drawing on reputation theory, which posits that external audiences' beliefs shape who...

We analyze a principal-agent procurement problem in which the principal (she) is unaware some of the marginal cost types of the agent (he). Communication arises naturally as some types of the agent may have an incentive to raise the principal's awareness (totally or partially) before a contract...

We consider a principal who wishes to screen an agent with discrete types by offering a menu of discrete quantities and discrete transfers. We assume that the principal's valuation is discrete strictly concave and use a discrete first-order approach. We model the agent's cost types as...

We model firm executives' compensation incentives when ESG metrics are added to their performance-vested contracts. Drawing on multitasking theory, we predict that incentives tied to standard accounting or financial metrics are reduced after introducing ESG metrics to induce executives to...

Information unraveling is an elegant theoretical argument suggesting that private information is voluntarily and fully revealed in many circumstances. However, the experimental literature has documented many cases of incomplete unraveling and has suggested limited depth of reasoning on the part...