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contracts which determine their managers' salaries. One contract simply gives managers incentives to maximize firm profits …, while the second contract gives an additional sales bonus. Although theory predicts the second contract to be chosen, it is … only rarely chosen in the experimental markets. This behavior is rational given that managers do not play according to the …
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We introduce a generalized theoretical approach to study imitation models and subject themodels to rigorous experimental testing. In our theoretical analysis we find that the differentpredictions of previous imitation models are due to different informational assumptions, notto different...
Persistent link: https://www.econbiz.de/10011509505
In this paper we study the behavior of rivals when there is a known probability of imminent entry. Experimental markets are used to collect data on pre- and post-entry production when there is an announced time of possible entry; some markets experience entry and other do not. In all pre-entry...
Persistent link: https://www.econbiz.de/10011451143
Before embarking on a project, a principal must often rely on an agent to learn about its profitability. We model this learning as a two-armed bandit problem and highlight the interaction between learning (experimentation) and production. We derive the optimal contract for both experimentation...
Persistent link: https://www.econbiz.de/10011926023
We investigate overlapping contests in multi-divisional organizations in which an individual's effort simultaneously determines the outcome of several contests on different hierarchical levels. We show that individuals in smaller units are advantaged in the grand (organization-wide) contest for...
Persistent link: https://www.econbiz.de/10012138834
, using a sample of managers and employees from a large company. We exogenously vary whether managers are informed about … matched to informed managers learn that the manager could base their incentive choice on cooperation levels. We find no … information. The absence of the signaling effect seems related to the perception of managers' intentions, a mitigating but …
Persistent link: https://www.econbiz.de/10014227737
schemes: piece rate and a winner-take-all tournament. We introduce social incentives by informing individuals that 50% of … social incentives, women increase their performance by approximately 23% and 27% in the piece rate and tournament payment …
Persistent link: https://www.econbiz.de/10012798210
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