This paper reports on a two-task principal-agent experiment in which only one task is contractible. The principal can …

incentives through contracts. We provide experimental evidence that principals have a strong preference for less complete … which provides strong pecuniary incentives through an incomplete contract. Selfish principals free-ride and exploit the … agents. Counter-intuitively, selfish agents are induced to work by an incomplete contract while fair agents shirk …

actors provide powerful incentives and become superior when there are some fair-minded players. The principals understand … enforcement power of explicit and implicit incentives. This contract preference is associated with the fact that explicit … incentives weaken the enforcement power of implicit bonus incentives significantly. Our results are largely consistent with …