We implement a laboratory experiment in which a principal has to decide on monitoring intensity and pay to investigate … be complements. The between-treatment variation in our experiment is qualitatively in line with the normative prediction …

men and women, and between workers at different levels of the hierarchy. We are unable to detect any difference between … robust differences in absence behaviour between different levels of the hierarchy are actually reversed when the effect of …

variation within hierarchy levels, (2) promotion premiums only in part explain hierarchical wage differences and (3) external … recruitment is observable on nearly any hierarchy level. We explain these empirical puzzles by combining job-promotion tournaments … with higher-level bonus payments in a two-tier hierarchy. Moreover, we show that under certain conditions the firm …