Several recent papers argue that contracts provide reference points that affect ex post behavior. We test this hypothesis in a canonical buyer-seller relationship with renegotiation. Our paper provides causal experimental evidence that an initial contract has a highly significant and...

In Bartling, Fehr and Schmidt (2012) we show theoretically and experimentally that it is optimal to grant discretion to workers if (i) discretion increases productivity, (ii) workers can be screened by past performance, (iii) some workers reciprocate high wages with high effort and (iv)...

Pay What You Want (PWYW) can be an attractive marketing strategy to price discriminate between fair-minded and selfish customers, to fully penetrate a market without giving away the product for free, and to undercut competitors that use posted prices. We report on laboratory experiments that...

In many cultures and industries gifts are given in order to influence the recipient, often at the expense of a third party. Examples include business gifts of firms and lobbyists. In a series of experiments, we show that, even without incentive or informational effects, small gifts strongly...

Employment contracts give a principal the authority to decide flexibly which task his agent should execute. However, there is a tradeoff, first pointed out by Simon (1951), between flexibility and employer moral hazard. An employment contract allows the principal to adjust the task quickly to...

This chapter was written in 2007 in order to inform the diagnostic of Liberia’s Poverty Reduction Strategy. Little has been written on the education system in Liberia since the start of the conflict in large part because of lack of good data. The chapter provides a diagnostic of Liberia’s...

This paper considers the evidence on the comparative extent to which faith-based civil society organizations (FB-CSOs) have benefited from increased funding related to the HIV/AIDS response in Africa. First, we review the literature on whether FB-CSOs have benefited from such funding, and find...

As for education, little has been written on the health system in Liberia since the start of the conflict in large part because of lack of good data. This chapter was also written in 2007 to inform the diagnostic of Liberia’s Poverty Reduction Strategy. It provides a diagnostic of Liberia’s...

Charitable tax deductions are one of the largest tax expenditures at the state and federal levels, and they are also crucial for the sustainability of the charitable nonprofit sector. Understanding some of the factors that drive changes in charitable tax deductions over time is needed to inform...

Faith-inspired institutions (FIIs) commonly have as their stated mission a desire to provide quality health services to all, and in particular a commitment to serve the poor, for example, by providing services in remote areas where there are none, or by making services more affordable for those...