Social impact bonds (SIBs) are an innovative financing mechanism for public goods. In a SIB, an investor provides capital to a service provider for a social intervention. The investor receives a return based on the outcome of the intervention relative to a predetermined benchmark. We describe...

We conduct a framed field experiment with 245 employed persons (no students) as subjectsand a real tax, which is levied on the subjects’ income from working in our real effort task. Inour first three treatments, the net wage is constant but gross wages are subject to differentconstant marginal...

The Peter Principle states that, after a promotion, the observed output of promotedemployees tends to fall. Lazear (2004) models this principle as resulting from a regression tothe mean of the transitory component of ability...

In this paper, we analyze a principal's optimal feedback policy in tournaments. We close agap in the literature by assuming the principal to be unable to commit to a certain policy atthe beginning of the tournament...

Theoretical analyses of (optimal) performance measures are typically performed within therealm of the linear agency model. This model implies that, for a given compensation scheme,the agent's optimal effort is unrelated to the amount of noise in the performance measure...

When a deficit occurs in the funding of collective goods, it is usually covered by raising theamount of taxes or by rationing the supply of the goods. This article compares the efficiencyof these institutions. We report the results of a 2x2 experiment based on a game in the firststage of which...

Loss aversion can occur in riskless and risky choices. Yet, there is no evidence whetherpeople who are loss averse in riskless choices are also loss averse in risky choices. Wemeasure individual-level loss aversion in riskless choices in an endowment effect experimentby eliciting both WTA and...

The population of most developed societies is ‘graying’. As life expectancy increases and thelarge baby-boom generation approaches retirement age, this has critical consequences formaintaining a high standard of living and the sustainability of pension systems. In the light ofthese labor-force...

The distinct historical and cultural experiences of American blacks and whites may influence whether members of those groups perceive a particular exchange as fair. We investigate racial differences in fairness standards using preferences for equal treatment in the ultimatum game, where...

We study how the distribution of other-regarding preferences develops with age. Based on a set of allocation choices, we can classify each of 717 subjects, aged 8 to 17 years, as either egalitarian, altruistic, or spiteful. Varying the allocation recipient as either an in-group or an out-group...