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 …

Modern 'principal-agent theory' has made a lot of progress in proposing theoretical Solutions to agency problems. This … evidence on offered contracts and effort choices in a simple agency game. In line with principal-agent theory we find that in … design has to regard an equity constraint that has so far been neglected by contract theory. In fact, most contract offers …

contracting is infeasible. One example is the study by Berg et al. (1995) of the investment game. In this game the person who … receives the investment is the one who may reward the investor. This is a direct reward game. Similar to Dufwenberg et al … investor may only be rewarded by a third person who did not receive his investment. Furthermore we investigate the influence of …

.’s investment game by introducing an upper bound to what a contributor can be repaid afterwards. By varying this upper bound …