We provide evidence on how two important types of institutions - dismissal barriers, and bonus pay - affect contract enforcement behavior in a market with incomplete contracts and repeated interactions. Dismissal barriers are shown to have a strong negative impact on worker performance, and...

In this paper we show that subtle forms of deceit undermine the effectiveness of incentives.We design an experiment in which the principal has an interest in underreporting the trueperformance difference between the agents in a dynamic tournament...