This paper examines whether long-term managerial bonus schemes change the allocative behavior of subjects in a laboratory setting. Using four different compensation schemes, we show that a necessary condition for reconciling divergent time preferences between principals and agents is a...

Modern hierarchical organizations, like corporations, must motivate agents to work hard. Given their pyramid structure, it is not surprising that one commonly used motivator is the promotion tournament. In such tournaments, agents compete to advance to positions at higher organizational levels....

This paper assesses whether affirmative action programs and equal opportunity laws affect the output of economic agents. More precisely, the authors find that equal opportunity laws and affirmative action programs always benefit disadvantaged groups. Equal opportunity laws also increase the...