Standard models of moral hazard predict a negative relationship between risk and incentives, but the empirical work has … incentives decreases with risk aversion, more risk-averse agents prefer lower-incentive contracts; thus, in the optimal contract …, incentives are positively correlated with endogenous risk. In contrast, if risk aversion is high enough, the possibility of …

A basic tenet of incentive theory states that there is a trade-off between risk and incentives. By implication, greater …

choose between (low-powered) team incentives and (high-powered) individual incentives. We observe that subjects exhibiting … high trust or reciprocity in the trust game are more likely to choose team incentives. When exposed to individual … incentives, workers who chose team incentives perform worse if both the unobservable interdependency between workers and their …