We show that concerns for fairness may have dramatic consequences for the optimal provision of incentives in a moral … incentives and become superior when there are also fair-minded players. These predictions are strongly supported by the results …

provision of informal incentives. Developing a model of a long-term employment relationship, I show that generous upfront wages … incentives promising a bonus in exchange for effort are more effective. Then, a longer remaining time horizon increases the … employer’s commitment. Generally, direct and reciprocity-based incentives reinforce each other and should thus optimally be …

This paper explores the optimal provision of dynamic incentives for employees with reciprocal preferences. Building on … his career. I also show that more competition might magnify the use of reciprocity-based incentives, and that a formal …