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 …

design I prove in the paper, that government - as principal - is only capable of applying "perverse" incentives towards the …

actors provide powerful incentives and become superior when there are some fair-minded players. The principals understand … enforcement power of explicit and implicit incentives. This contract preference is associated with the fact that explicit … incentives weaken the enforcement power of implicit bonus incentives significantly. Our results are largely consistent with …