We build a model of optimal design of managerial incentive schemes when the production technology exhibits decreasing returns to scale and firms compete à la Cournot. We borrow Fershtman and Judd (1987) and Kräkel (2005) framework. We show how there is a dominant strategy for entrepreneurs to...

We report experimental results on a prisoners' dilemma implemented in a way which allows us to elicit incentive-compatible valuations of the game. We test the hypothesis that players'' valuations coincide with their Nash equilibrium earnings. Our results offer significantly less support for this...

We report experimental results on a prisoners' dilemma implemented in a way which allows us to elicit incentive-compatible valuations of the game. We test the hypothesis that players'' valuations coincide with their Nash equilibrium earnings. Our results offer significantly less support for this...