This article analyses belief updating when agents receive a signal that restricts the number of possible states of the world. We create an experiment on individual choice under uncertainty. In this experiment, the subject observes an urn, containing yellow and blue balls, whose composition is...

We study the impact of information manipulation by a principal on the agent’s effort. In a context of asymmetric information at the principal’s advantage, we test experimentally the principal’s willingness to bias (overestimate or under-estimate) the information she gives to her agent on...

We experimentally manipulate two aspects of the cognitive environment, cognitive depletion and recent sugar intake, and estimate their effects on individuals' time preferences in a way that allows us to identify the structural parameters of a simple (α,β,δ) intertemporal utility function for...

We investigate the role of advisers in the transmission of ethically relevant information, a critical aspect of executive decision making in organizations. In our laboratory experiment, advisers are informed about the negative externalities associated with the decision-maker's choices and...

Variable pay not only creates a link between pay and performance but may also help firms in attracting the more productive employees (Lazear 1986, 2000). However, due to lack of natural data, empirical analyses of the relative importance of the selection and incentive effects of pay schemes are...

Agency theory assumes that tighter monitoring by the principal should motivate the agent to raise his effort level whereas the ?crowding-out? literature suggests that it may reduce the overall work effort. These two assertions are not necessarily contradictory provided that the nature of the...

The paper extends the standard tax evasion model by allowing for social interactions. In Manski?s (1993) nomenclature, our model takes into account social conformity effects (i.e., endogenous interactions), fairness effects (i.e., exogenous interactions) and sorting effects (i.e., correlated...

Male and female choices differ in many economic situations, e.g., on the labor market. This paper considers whether such differences are driven by different attitudes towards competition. In our experiment subjects choose between a tournament and a piece-rate pay scheme before performing a real...

When exogenously imposed, rank-order tournaments have incentive properties but their overall efficiency is reduced by a high variance in performance (Bull, Schotter, and Weigelt 1987). However, since the efficiency of performance-related pay is attributable both to its incentive effect and to...

The labor economics literature has shown that the efficient bargaining model, in which wage and employment are negotiated simultaneously, is less frequently used on unionized markets than the less efficient right-to-manage model, in which wage is determined via bargaining and employment...