Fehr, Ernst; Schmidt, Klaus M. ![]() |
This is the latest version of this item.
Abstract
This paper reports on a two-task principal agent experiment in which only one task is contractible. The principal can either offer a piece-rate contract or a (voluntary) bonus to the agent. Bonus contracts strongly outperform piece-rate contracts. Many principals reward high effort on both tasks with substantial bonuses. Agents anticipate this and provide high effort on both tasks, in contrast, almost all agents with a piece-rate contract focus on the first task and disregard the second. Principals understand this and predominantly offer bonus contracts. This behavior contradicts the self-interest theory but is consistent with theories of fairness.
Item Type: | Journal article |
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Faculties: | Economics Economics > Chairs > Seminar for Economic Theory |
Subjects: | 300 Social sciences > 330 Economics |
Language: | English |
ID Code: | 20657 |
Deposited On: | 15. Apr 2014 09:01 |
Last Modified: | 04. Nov 2020 13:01 |
Available Versions of this Item
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Fairness and Incentives in a Multi-Task Principle-Agent Model. (deposited 15. Apr 2014 09:01)
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Fairness and Incentives in a Multi-Task Principal-Agent Model. (deposited 13. Apr 2005)
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Fairness and Incentives in a Multi-Task Principal-Agent Model. (deposited 15. Apr 2014 08:53)
- Fairness and incentives in a multi-task principal-agent model. (deposited 15. Apr 2014 09:01) [Currently Displayed]
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Fairness and Incentives in a Multi-Task Principal-Agent Model. (deposited 15. Apr 2014 08:53)
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Fairness and Incentives in a Multi-Task Principal-Agent Model. (deposited 13. Apr 2005)