One of the standard predictions of the agency theory is that more incentives can be given to agents with lower risk aversion. In this paper, we show that this relationship may be absent or reversed when the technology is endogenous and projects with a higher efficiency are also riskier. Using a...

One of the standard predictions of the agency theory is that more incentives can be given to agents with lower risk aversion. In this paper, we show that this relationship may be absent or reversed when the technology is endogenous and projects with a higher efficiency are also riskier. Using a...

We propose a framework in order to econometrically estimate case-based learning and apply it to empirical data from twelve 2 × 2 mixed strategy equilibria experiments. Case-based learning allows agents to explicitly incorporate information available to the experimental subjects in a simple,...

A simple expression is derived for the optimal strategy in the minimum effort game. This maps from player beliefs to an optimal effort level. From this expression the set of Nash equilibria in the game is fully characterized. All Nash equilibria are symmetric and involve at most two actions...

A simple expression is derived for the optimal strategy in the minimum effort game. This maps from player beliefs to an optimal effort level. From this expression the set of Nash equilibria in the game is fully characterized. All Nash equilibria are symmetric and involve at most two actions...

We propose a framework in order to econometrically estimate case-based learning and apply it to empirical data from twelve 2 × 2 mixed strategy equilibria experiments. Case-based learning allows agents to explicitly incorporate information available to the experimental subjects in a simple,...

This paper studies the problem of screening teams of either moral or altruistic agents, in a setting where agents choose whether or not to exert effort in order to achieve a high output for the principal. I show that there exists no separating equilibrium menu of contracts that induces the...

We test the empirical content of the assumption of preference dependent beliefs using a behavioral model of strategic decision making in which the rankings of individuals over final outcomes in simple games influence their beliefs over the opponent's behavior. This approach- by analogy with...

We test the empirical content of the assumption of preference dependent beliefs using a behavioral model of strategic decision making in which the rankings of individuals over final outcomes in simple games influence their beliefs over the opponent’s behavior. This approach— by analogy with...

In an agency model with adverse selection, we study how hidden interactions between agents affect the optimal contract. The principal employs two agents who learn their task environments through their involvement. The principal cannot observe the task environments. It is important to note that...