We study a simple contracting game with a principal and two agents. Contracts exert an externalities on non contractors. The principal can either contract both agents in a centralized manner, or delegate one agent to contract the other. We show that the choice of the principal depends on the...

This paper explores why competing firms can choose to outsource to an external common supplier that does not have a cost advantage in input production. The supplier, through its contract offers, manages to generate asymmetry, to alter product market competition, and to extract profits from the...

Purpose The purpose of this paper is to examine whether reputation element affects the decision relative performance of trust, bonus and incentive contracts using social laboratory experiments. Design/methodology/approach The study conducts the following lab experiments bonus-incentive treatment...

This paper addresses the question of delegation in an organisation where there is an initial asymmetry of information between the principal and the agent. We assume that the principal cannot use revelation techniques a la Baron Myerson to elicit agent's superior information and in contrast, we...

Es gibt eine wachsende Literatur zur ”verhaltensorientierten“bzw. ”psychologischen“ Spieltheorie. Die meisten dieser Ansätze beziehen verschiedeneVorstellungen von Fairness, Ungleichheitsaversion oder andere intrinsischeMotive in die Nutzenfunktion ein, um empirisch beobachtbare...

Economic theory has evolved without paying proper attention to behavioral approaches,especially to social, economic, and cognitive psychology. This has recently changed byincluding behavioral economics courses in many doctoral study programs. Although thisnew development is most welcome, the...

„Folk economics“ is the economic ‘theory’ of common sense, and analogously „folk ethics“ is the moral ‘theory’ of common sense. Typical of „folk-economic beliefs“ are erroneous causal attributions. Typical of „folk-ethical beliefs“ are utopian or dysfunctional criteria...

Recently, Aoki proposed the concept of substantive institutions which relates outcomes ofstrategic interaction with public representations of equilibrium states of games. I argue thatthe Aoki model can be grounded in theories of distributed cognition and performativity,which I put into the...