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-order’ monitoring can actually facilitate the deception of fully rational consumers, to deter them from otherwise optimal search …
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In this paper we show that subtle forms of deceit undermine the effectiveness of incentives. We design an experiment in which the principal has an interest in underreporting the true performance difference between the agents in a dynamic tournament. According to the standard approach, rational...
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parameterizations studied. The theoretical conclusions are tested through laboratory experiments. Subjects have difficulty identifying …
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