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Second-degree moral hazard in a real-world credence goods market

Balafoutas, Loukas; Kerschbamer, Rudolf; Sutter, Matthias - 2013

Empirical literature on moral hazard focuses exclusively on the direct impact of asymmetric information on market …

Persistent link: https://www.econbiz.de/10010207314

Feedback and incentives : experimental evidence

Eriksson, Tor (contributor); Poulsen, Anders (contributor); … - 2008

This paper experimentally investigates the impact of different pay and relative performance information policies on … employee effort. We explore three information policies: No feedback about relative performance, feedback given halfway through … off. Moreover, in both pay schemes information feedback reduces the quality of the low performers' work. -- Performance …

Persistent link: https://www.econbiz.de/10003688788

Self-selection and the efficiency of tournaments

Eriksson, Tor (contributor); Teyssier, Sabrina (contributor) - 2006

When exogenously imposed, rank-order tournaments have incentive properties but their overall efficiency is reduced by a high variance in performance (Bull, Schotter, and Weigelt 1987). However, since the efficiency of performance-related pay is attributable both to its incentive effect and to...

Persistent link: https://www.econbiz.de/10003283430

Effort and comparison income : experimental and survey evidence

Clark, Andrew E. (contributor); Masclet, David (contributor) - 2006

This paper considers the effect of status or relative income on work effort combining experimental evidence from a gift-exchange game with ISSP survey data. We find a consistent negative effect of others' incomes on individual effort in both datasets. The individual's rank in the income...

Persistent link: https://www.econbiz.de/10003333113

Incentives vs. selection in promotion tournaments : can a designer kill two birds with one stone?

Höchtl, Wolfgang; Kerschbamer, Rudolf; Stracke, Rudi; … - 2011

This paper studies the performance of promotion tournaments with heterogeneous participants in two dimensions: incentive provision and selection. Our theoretical analysis reveals a trade-off for the tournament designer between the two goals: While total effort is maximized if less heterogeneous...

Persistent link: https://www.econbiz.de/10009308037

The impact of distributional preferences on (experimental) markets for expert services

Kerschbamer, Rudolf; Sutter, Matthias; Dulleck, Uwe - 2009

Credence goods markets suffer from inefficiencies arising from informational asymmetries between expert sellers and customers. While standard theory predicts that inefficiencies disappear if customers can verify the quality received, verifiability fails to yield efficiency in experiments with...

Persistent link: https://www.econbiz.de/10003931304

Guilt from promise-breaking and trust in markets for expert services : theory and experiment

Beck, Adrian; Kerschbamer, Rudolf; Qiu, Jianying; … - 2010

We examine the influence of guilt and trust on the performance of credence goods markets. An expert can make a promise to a consumer first, whereupon the consumer can express her trust by paying an interaction price before the expert’s provision and charging decisions. We argue that the...

Persistent link: https://www.econbiz.de/10003944278

What drives taxi drivers? : a field experiment on fraud in a market for credence goods

Balafoutas, Loukas; Beck, Adrian; Kerschbamer, Rudolf; … - 2011

measure different types of fraud and to examine the influence of passengers' presumed information and income on the extent of … fraud. Results reveal that taxi drivers cheat passengers in systematic ways: Passengers with inferior information about … optimal routes are taken on longer detours while asymmetric information on the local tariff system leads to manipulated bills …

Persistent link: https://www.econbiz.de/10009306313

Lies and biased evaluation : a real-effort experiment

Rosaz, Julie; Villeval, Marie-Claire - 2011

This paper presents the results of a laboratory experiment in which workers perform a real-effort task and supervisors report the workers' performance to the experimenter. The report is non verifiable and determines the earnings of both the supervisor and the worker. We find that not all the...

Persistent link: https://www.econbiz.de/10009311502

The hidden costs of tax evasion : collaborative tax evasion in markets for expert services

Balafoutas, Loukas; Beck, Adrian; Kerschbamer, Rudolf; … - 2015

contractual incompleteness results from asymmetric information on the welfare maximizing quality of the good. Our results suggest …

Persistent link: https://www.econbiz.de/10010529409