We show that concerns for fairness may have dramatic consequences for the optimal provision of incentives in a moral … hazard context. Incentive contracts that are optimal when there are only selfish actors become inferior when some agents are … incentives and become superior when there are also fair-minded players. These predictions are strongly supported by the results …

derive the optimal contract for both experimentation and production when the agent has private information about his … asymmetric information is endogenously determined by the length of the experimentation stage. An optimal contract uses the length …

, competition does not eliminate but rather exacerbates inefficiencies arising from contracting with focused agents. Common contract …

weights in payout calculations, and contribute little to executive pay risk. Such ESG metrics with arguably weak incentive … incentives, are only found in sectors with a large environmental footprint. …

updates beliefs using Bayes' rule. An exploitation contract in which the agent is only compensated for his effort if the extra … profit materializes maximizes the principal's profits. In this optimal contract, the agent's principal-expected compensation …

Using field and laboratory experiments, we demonstrate that the complexity of incentive schemes and worker bounded … rationality can affect effort provision, by shrouding attributes of the incentives. In our setting, complexity leads workers to … over-provide effort relative to a fully rational benchmark, and improves efficiency. We identify contract features, and …

welfare can be improved by threshold contracts. A threshold incentive contract stipulates a performance level which a …When politicians are provided with insufficient incentives by the democratic election mechanism, we show that social …