Previous studies of loss aversion in decisions under risk have led to mixed results. Losses appear to loom larger than gains in some settings, but not in others. The current paper clarifies these results by highlighting six experimental manipulations that tend to increase the likelihood of the...

We examine how adding an Attractive but Unattainable Alternative (AUA) to a set of available but less attractive alternatives influences evaluations of near vs.\ distant future sets of alternatives. According to Construal Level Theory (Liberman \& Trope, 2008) including an AUA would decrease the...

This paper studies how social relationships between managers and employees affect relational incentive contracts. To this end we develop a simple dynamic principal-agent model where both players may have feelings of altruism or spite toward each other. The contract may contain two types of...

This paper studies how social relationships between managers and employees affect relational incentive contracts. To this end we develop a simple dynamic principal-agent model where both players may have feelings of altruism or spite toward each other. The contract may contain two types of...

Performance measurement in the public sector is largely based on objective metrics, which may be subject to gaming behaviour. This paper investigates a novel subjective performance evaluation system where independent inspectors visit schools at very short notice, publicly disclose their findings...

It is often claimed that supervisors do not differentiate enough between high and low performing employees when evaluating performance. The purpose of this paper is to study the incentive effects of this behavior empirically. We first show in a simple model that the perceived degree of past...

We consider a situation where an agent's effort is monitored by a supervisor who cares for the agent's well being. This is modeled by incorporating the agent's utility into the utility function of the supervisor. The first best solution can be implemented even if the supervisor's preferences are...

The quality of subjective performance evaluation is dependent on the incentive structures evaluators face. Figure skating competitions provide a unique opportunity to study subjective evaluation. Using scoring data from World Figure Skating Championships between 2001 and 2003, I test for the...

We analyze optimal contracts in a hierarchy consisting of a principal, a supervisor and an agent. The supervisor is either neutral or altruistic towards the agent, but his preferences are private information. In a model with two supervisor types, we find that the optimal contract may be very...

The quality of subjective performance evaluation is dependent on the incentive structures faced by evaluators, in particular on how they are monitored and themselves evaluated. Figure skating competitions provide a unique opportunity to study subjective evaluation. This paper develops and tests...