Managers like to think well of themselves, and of the firms that employ them. However, positive illusions can bias a …, we first study the natural benchmark equilibrium provided by unbiased decision makers. We then introduce self …-serving behavior in the presence of myopic principals, or of forward-looking principals who anticipate the limitations of managers and …

The paper presents experimental evidence on the impact of managers and their incentives on the behavior of group … particular if the managers payoff does not depend on the members behavior. Different incentives schemes induce the managers to … lead the groups into different directions but incentivized managers are less capable of inducing very high or low contest …