We experimentally test the effect of enforceable non-compete clauses on working efforts. The employee can invest into the probability of making a profitable innovation. After a successful innovation (Win) the employee may want to leave the firm (Shift) whereas after an innovation failure (Lose)...

Most research in economics models agents somehow motivated by outcomes. Here, we model agents motivated by procedures instead, where procedures are defined independently of an outcome. To that end, we design procedures which yield the same expected outcomes or carry the same information on...

We assess the empirical validity of the overall theoretical framework of other-regarding preferences by focusing on those preference axioms that are common to all the prominent theories of outcome-based other-regarding preferences. This common set of preference axioms leads to a testable...

We study the interaction of organizational culture and personal prosocial orientation in team work where teams compete against each other. In a computerized lab experiment with minimal group design, we prime subjects to two alternative organizational cultures emphasizing either self-enhancement...

Tournaments represent an increasingly important component of organizational compensation systems. While prior research focused on fixed-prize tournaments, i.e., on tournaments where the prize or prize sum to be awarded is set in advance, we introduce a new type of tournament into the literature:...

While significant attention is given to the concept of absorptive capacity as a source of competitive advantage in firms, a major drawback exists in the way it is unidimensionally defined in micro-level analysis. The paper addresses this limitation and reconceptualizes absorptive capacity as a...

A principal-agent multitasking model is used to explore the effects of different tax schemes on innovation in a pure knowledge economy. Corporate taxes and labor income taxes can affect both the firm owner’s and the employee’s incentives to commit to innovative tasks, when the former...

In the past decades the role of profit sharing schemes (PSS) as a way to foster innovation in a principal-agent context, and more generally of innovation in economic growth, have been widely acknowledged and studied. However, surprisingly little has been done to analyze the interactions between...