Implicit employment contracts are a common way to motivate firm productivity but also require that employees trust management to be fair when allocating post-production firm resources between employees and owners. We use an experiment to study the problem of motivating firm productivity, which...

<heading id="h1" level="1" implicit="yes" format="display">ABSTRACT</heading>Implicit employment contracts are a common way to motivate firm productivity but also require that employees trust management to be fair when allocating postproduction firm resources between employees and owners. We use an experiment to study the problem of motivating firm productivity,...

We investigate how the budget levels embedded in budget-based contracts affect individual effort and risk-taking. We show that, from a wealth maximization perspective, a tradeoff exists between motivating effort and encouraging risk-taking. We illustrate an inverted-U relation between budget...

<heading id="h1" level="1" implicit="yes" format="display">ABSTRACT</heading>We examine how worker productivity differs when compensation is based on quantity, creativity, or the product of both measures. In an experiment in which participants design "rebus puzzles," we find that combining quantity and creativity measures in a creativity-weighted pay scheme...

Analysts and the financial press are often accused of paying too much attention to one another, instead of providing their own independent analyses of fundamental information. Prior research suggests that such mutual observation can render consensus forecasts too extreme, more redundant, and...

This paper reports the results of an experiment showing that investors' forecasts of earnings are affected by the investment positions they hold and by whether they are facing the prospect of a gain or loss on those investments. The results are consistent with theories of motivated reasoning...

Two experiments with MBA-student participants support Barberis, Shleifer, and Vishny's (1998) prediction that investors expect random-walk sequences to shift between continuation regimes (in which changes tend to be followed by like changes) and reversal regimes (in which changes tend to be...