This paper studies the interplay between economic incentives and social norms in firms. We introduce a general framework to model social norms arguing that norms stem from agents' desire for, or peer pressure towards, social efficiency. In a simple model of team production we examine the...

We consider repeated trust game experiments to study the interplay between explicit and relational incentives. After having gained experience with two payoff variations of the trust game, subjects in the final part explicitly choose which of these two variants to play. Theory predicts that...

Many executives have compensation that is potentially forfeit conditioned on the circumstances surrounding their departure from the firm. We study firms' endogenous decisions to use such compensation "holdbacks" as a bonding device and find that firms with higher executive replacement costs,...

Research suggests that restricted labor mobility discourages managers from investing in human capital and reduces firm value. However, whether firms re-incentivize managers to mitigate its adverse effects remains unexplored. We find that after the adoption of the inevitable disclosure doctrine...