design has to regard an equity constraint that has so far been neglected by contract theory. In fact, most contract offers … observed in the experiment aim at fair surplus sharing. -- principal-agent theory ; contract theory ; fair sharing ; incentive …Modern 'principal-agent theory' has made a lot of progress in proposing theoretical Solutions to agency problems. This …

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 …

Fairness is a strong concern as shown by the robust results of dictator giving and ultimatum experiments. Efficiency … provision games. In our experiment participants can increase efficiency by gift giving at the cost of reducing their own … for mutual gift giving. In both cases decisions can be conditioned on whether there is or there is not an efficiency gain …

performance elasticities are contrary to predictions of agency theory. Both results provide further support to the common belief … that compensation contracts in public corporations seem imperfectly tied to firm performance and managers' tasks. …

two period game, involving the choke of the contract; length by the principal and an investment choke by the agent. In … contrast to the game theoretic predictions, we find that investment of the worker and length of contract; are strictly … although the model is fully deterministic. This could imply a behaviorally relevant difference between contract and market …