Principals’ principles when agents’ actions are hidden

Keser, Claudia; Willinger, Marc

doi:10.1016/s0167-7187(99)00038-7

Cited by 70 publications

(60 citation statements)

References 7 publications

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“…Risk aversion and loss aversion 11 may however favor the choice of the single-issue bargaining agenda since a deterministic environment will be preferred to a stochastic one. For example, loss aversion has been suspected to influence the choice of contracts in principal-agent games (Keser and Willinger, 2000). In our game, choosing SIA may diminish the risk that firms earn less than their outside option in case of a bad state of nature.…”

Section: Predictionsmentioning

confidence: 90%

Efficiency and behavioral considerations in labor negotiations

Königstein¹,

Villeval²

2010

Journal of Economic Psychology

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Experimental literature has shown that social preferences influence how individuals bargain and make sharing decisions. It usually considers situations in which individuals negotiate on a single issue. This paper explores a different environment and reports on an experiment based on a non-cooperative game in which the choice of the bargaining agenda is endogenous. We fnd that firms reveal a strong preference for single-issue bargaining although the subgame perfect equilibrium predicts the choice of the multi-issue bargaining. In multi-issue bargaining unions offer smaller relative payoff shares to firms than in singleissue bargaining and this leads to a higher conflict rate than in a single-issue bargaining. Social preferences and a concern for relative payoffs support this preference for a restricted bargaining agenda but they induce a loss of efficiency.

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Section: Predictionsmentioning

confidence: 90%

Efficiency and behavioral considerations in labor negotiations

Königstein¹,

Villeval²

2010

Journal of Economic Psychology

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“…A similar result is provided by Güth et al (1998) in a dynamic principal-agent environment. Keser and Willinger (2000) present evidence that subjects in the role of agents choose payoff-maximizing action, while subjects in the role of principals offer non-optimal contracts. Anderhub et al (2003) study the relationship between contract duration and firm-specific investments in a principal-agent setting.…”

Section: Introductionmentioning

confidence: 94%

Co-employment of permanently and temporarily employed agents

Güth¹,

Kocher²,

Popova

2012

Labour Economics

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One-shot interaction and repeated interaction often co-exist in the real world.We study possible behavioral effects of this co-existence in a principal-agent setting, in which a principal simultaneously employs a permanent and a temporary agent. Our experimental results indicate that there is "discrimination" between the two agents and that the available information for agents determines the extent of this discrimination, even though the theoretical solution of the game implies equal treatment of agents.Discrimination is, thus, a consequence of reciprocity. Agents that are discriminated against react negatively by withholding effort. JEL classification: C72, C91, D21, J31Keywords: principal-agent problem; permanent and temporary employment; fairness; wage discrimination # We would like to thank Jianying Qiu and Torsten Weiland for their excellent help in conducting the experiments. Participants of the ESA European Meeting in Lyon, the IAREP/SABE World Meeting in Rome, and the doctoral seminar at the University of Jena provided helpful comments on an earlier version of the paper.

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“…Previous experiments on shirking and explicit incentives in a gift-exchange environment include Fehr et al (1997), Fehr et al (2007), Fehr and Gächter (2002), and based on more formal principal-agent models, Fehr et al (1996), Keser and Willinger (2000), Anderhub, Gächter and Königstein (2002), as well as Dickinson and Villeval (2008).…”

Section: Experimental Evidencementioning

confidence: 99%

Monitoring and Pay: An Experiment on Employee Performance Under Endogenous Supervision

Dittrich

Kocher

2011

SSRN Journal

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We present an experimental test of a shirking model where monitoring intensity is endogenous and effort a continuous variable. Wage level, monitoring intensity and consequently the desired enforceable effort level are jointly determined by the maximization problem of the firm. As a result, monitoring and pay should be complements. In our experiment, between and within treatment variation is qualitatively in line with the normative predictions of the model under standard assumptions. Yet, we also find evidence for reciprocal behavior. Our data analysis shows, however, that it does not pay for the employer to solely rely on the reciprocity of employees.

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Principals’ principles when agents’ actions are hidden

Cited by 70 publications

References 7 publications

Efficiency and behavioral considerations in labor negotiations

Efficiency and behavioral considerations in labor negotiations

Co-employment of permanently and temporarily employed agents

Monitoring and Pay: An Experiment on Employee Performance Under Endogenous Supervision

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