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Use and abuse of authority: A behavioral foundation of the employment relation

Fehr, Ernst; Schmidt, Klaus M.; Bartling, Björn - Institut für Volkswirtschaftslehre, … - 2012

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...

Persistent link: https://www.econbiz.de/10010817249

How do informal agreements and renegotiation shape contractual reference points?

Fehr, Ernst; Hart, Oliver; Zehnder, Christian - Institut für Volkswirtschaftslehre, … - 2011

Previous experimental work provides encouraging support for some of the central assumptions underlying Hart and Moore (2008)’s theory of contractual reference points. However, existing studies ignore realistic aspects of trading relationships such as informal agreements and ex post...

Persistent link: https://www.econbiz.de/10009358972

Reference points in renegotiations: The role of contracts and competition

Schmidt, Klaus M.; Bartling, Björn - Institut für Volkswirtschaftslehre, … - 2012

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...

Persistent link: https://www.econbiz.de/10010604136

Rotten Kids With Bad Intentions

Netzer, Nick; Schmutzler, Armin - Institut für Volkswirtschaftslehre, … - 2009

We examine a “Rotten Kid” model (Becker 1974) where a player with social preferences interacts with an egoistic player. We assume that social preferences are intentionbased rather than outcome-based. In a very general multi-stage setting we show that any equilibrium must involve mutually...

Persistent link: https://www.econbiz.de/10008545923

Mechanism design and intentions

Bierbrauer, Felix; Netzer, Nick - Institut für Volkswirtschaftslehre, … - 2012

We introduce intention-based social preferences into a mechanism design framework with independent private values and quasilinear payoffs. For the case where the designer has no information about the intensity of social preferences, we provide conditions under which mechanisms which have been...

Persistent link: https://www.econbiz.de/10010817273

Bad boys: how criminal identity salience affects rule violation

Cohn, Alain; Maréchal, Michel André; Noll, Thomas - Institut für Volkswirtschaftslehre, … - 2013

We conducted an experiment with 182 inmates from a maximum security prison to analyze the impact of criminal identity … salience on cheating. The results show that inmates cheat more when we exogenously render their criminal identity more salient …. This effect is specific to individuals who have a criminal identity, because an additional placebo experiment shows that …

Persistent link: https://www.econbiz.de/10011277310

Seeds of distrust: Conflict in Uganda

Rohner, Dominic; Thoenig, Mathias; Zilibotti, Fabrizio - Institut für Volkswirtschaftslehre, … - 2011

. Using individual and county-level data, we document causal effects on trust and ethnic identity of an exogenous outburst of … intense fighting decreases generalized trust and increases ethnic identity. The effects are quantitatively large and robust to …

Persistent link: https://www.econbiz.de/10009386338

Caste and punishment: the legacy of caste culture in norm enforcement

Hoff, Karla; Kshetramade, Mayuresh; Fehr, Ernst - Institut für Volkswirtschaftslehre, … - 2010

Well-functioning groups enforce social norms that restrain opportunism, but the social structure of a society may encourage or inhibit norm enforcement. Here we study how the exogenous assignment to different positions in an extreme social hierarchy – the caste system – affects...

Persistent link: https://www.econbiz.de/10008625740

Fairness and Retaliation: The Economics of Reciprocitys

Fehr, Ernst; Gaechter, Simon - Institut für Volkswirtschaftslehre, …

This paper shows that reciprocity has powerful implications for many economic domains. It is an important determinant in the enforcement of contracts and social norms and enhances the possibilities of collective action greatly. Reciprocity may render the provision of explicit incentive...

Persistent link: https://www.econbiz.de/10005184890

The Role of Social Work Norms in Job Searching and Subjective Well-Being

Stutzer, Alois; Lalive, Rafael - Institut für Volkswirtschaftslehre, …

Social norms are usually neglected in economics, because they are to a large extent enforced through non-market interactions and difficult to isolate empirically. In this paper, we offer a direct measure of the social norm to work and we show that this norm has important economic effects. The...

Persistent link: https://www.econbiz.de/10005585651