Fairness and incentives in a multi-task principal-agent model

Fehr, Ernst und Schmidt, Klaus M. (2004): Fairness and incentives in a multi-task principal-agent model. In: Scandinavian Journal of Economics, Bd. 106, Nr. 3: S. 453-474

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.

• Dokumententyp: Zeitschriftenartikel
• Fakultät: Volkswirtschaft ; Volkswirtschaft > Lehrstühle > Seminar für Wirtschaftstheorie
• Themengebiete: 300 Sozialwissenschaften > 330 Wirtschaft
• Sprache: Englisch