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have a decisive impact on the actual and optimal choices in the reciprocity-based contracts. The principal pays higher … salaries in the bonus contract as compared to an incentive contract. Originality/value The study contributes to the behavioral … economic literature in the following dimensions. The existing literature on lab experiments considers a bonus contract as …
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We show that concerns for fairness may have dramatic consequences for the optimal provision of incentives in a moral hazard context. Incentive contracts that are optimal when there are only selfish actors become inferior when some agents are concerned about fairness. Conversely, contracts that...
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, which offer important new insights into the interaction of contract choices, fairness and incentives. …
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