Holmstrom's (1982/99) career concerns model has become an important workhorse for the analysis of agency issues in many fields. The underlying signal jamming argument requires players to use information in a Bayesian way - which may or may not reasonably approximate real-life decision makers'...

We experimentally investigate a simple version of Holmstroem's career concerns model in which firms compete for agents in two consecutive periods. Profits of firms are determined by agents' unknown ability and the effort they choose. Before making second-period wage offers firms are informed...

The Peter Principle states that, after a promotion, the observed output of promoted employees tends to fall. Lazear (2004) models this principle as resulting from a regression to the mean of the transitory component of ability. Our experiment reproduces this model in the laboratory by means of...

Confidence in one's own abilities is often seen as an important determinant of being successful. Empirical evidence about how such beliefs about one's own abilities causally influence choices is, however, sparse. In this paper, we use a stylized laboratory experiment to investigate the causal...

Confidence is often seen as the key to success. Empirical evidence about whether such beliefs causally map into actions is, however, sparse. In this paper, we experimentally investigate the causal effect of an increase in confidence about one's own ability on two central choices made by workers...