Organizations must not only take the right decisions, they must also ensure that these decisions are effectively implemented. Fama & Jensen (1983) argue that the same members of many organization are often responsible for both decision initiation and implementation. If these have social...

In this laboratory experiment we study the use of strategic ignorance to delegate real authority within a firm. A worker can gather information on investment projects, while a manager makes the implementation decision. The manager can monitor the worker. This allows her to better exploit the...

Empirical research suggests that - rather than improving incentives - exerting controlcan reduce workers' performance by eroding motivation. The present paper shows thatintention-based reciprocity can cause such motivational crowding-out if individuals differin their propensity for reciprocity...

Team production is a frequent feature of modern organizations. Combined with team incentives, team production can create externalities among workers, since their utility upon accepting a contract depends on their team's performance and therefore on their colleagues' productivity. We study the...

Self-signaling theory argues that individuals partly behave prosocially to create or uphold a favorable self-image. To study self-signaling theory, we investigate whether increasing self-image concerns affects charitable giving. In our experiment subjects divide 20 euros between themselves and a...

This paper considers a firm whose potential employees have private information on both their productivity and the extent of their fairness concerns. Fairness is modelled as inequity aversion, where fair-minded workers suffer if their colleagues get more income net of production costs. Screening...

In the hold-up problem incomplete contracts cause the proceeds of relation-specific investments to be allocated by ex-post bargaining. The present paper investigates the efficiency of incomplete contracts if individuals have heterogeneous preferences implying heterogeneous bargaining behavior...

In a laboratory experiment, we measure subjects’ willingness to pay for a transparently useless decision right concerning the choice between two real effort tasks. We also elicit for each participant her change in beliefs about the likelihood of receiving her preferred task if she rather than...