This paper examines the relationship between firms’ wage offers and workers’ supply of effort using a three-period experiment. In equilibrium, firms will offer deferred compensation: first period productivity is positive and wages are zero, while third period productivity is zero and wages...

In this experiment, we study whether individuals' labour market state (i.e. employed, student or NEET) affect their trusting and trustworthy behavior. To identify both the effect of labour market state and the effect of information on others' labour market state over one's behavior, we implement...

Theoretical analyses of (optimal) performance measures are typically performed within the realm of the linear agency model. This model implies that, for a given compensation scheme, the agent’s optimal effort is unrelated to the amount of noise in the performance measure. In contrast,...

Comparison of three related adverse selection models is presented. There is a selfish owner, a selfish employee, and an imperfectly altruistic employee. Model 1 involves hiring choice. The owner hires the altruist because he produces the same for less pay due to his positive externality for the...

In this paper, we consider a version of the Holmstr¨om-Milgrom linear model with two tasks, production and administration, where performance is harder to measure in the latter. Both the principal and agent can devote effort to these tasks. We assume there are gains from specialization and that...

Procedural fairness research has argued that giving people a voice in decision-making procedures leads to increased outcome satisfaction and enhanced compliance with decisions. The impact of voice on agents' motivation to perform well is investigated in a simple gift-exchange experiment, thereby...

This paper suggests a holistic framework for analysis of agrarian contracts and investigates the contractual structure in transitional Bulgarian agriculture. Firstly, it incorporates the interdisciplinary New Institutional and Transaction Costs Economics (combining Economics, Organization, Law,...

This paper suggests a holistic framework for analysis of agrarian contracts and investigates the contractual structure in transitional Bulgarian agriculture. Firstly, it incorporates the interdisciplinary New Institutional and Transaction Costs Economics (combining Economics, Organization, Law,...

This paper studies how social relationships between managers and employees affect relational incentive contracts. To this end we develop a simple dynamic principal-agent model where both players may have feelings of altruism or spite toward each other. The contract may contain two types of...

Inspired by a recent observation about an online retail company, this paper explains why a firm may find it optimal to offer an exit bonus to recent hires so as to induce self-selection. We study a double adverse selection problem, in which the principal can neither observe agents’ commitment...