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Can exit prizes induce lame ducks to shirk less? Experimental evidence

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  • Leif Helland

    (BI Norwegian Business School)

  • Jon Hovi

    (University of Oslo and CICERO)

  • Lars Monkerud

    (BI Norwegian Business School)

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    Abstract

    Elected representatives serving their final period face only weak incentives to provide costly effort. However, overlapping generations (OLG) models suggest that exit prizes sustained by trigger strategies can induce representatives in their final period to provide such effort. We evaluate this hypothesis using a simple OLG public good experiment, the central treatment being whether exit prizes are permitted. We find that a significantly higher number of subjects in their final period contribute when exit prizes are permitted. However, this result does not originate from use of trigger strategies. More likely explanations include gift-exchange and focal-point effects.

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    Bibliographic Info

    Article provided by Europa Grande in its journal European Journal of Government and Economics.

    Volume (Year): 1 (2012)
    Issue (Month): 2 (December)
    Pages: 106-125

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    Handle: RePEc:egr:ejge00:v:1:i:2:p:106-125

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    Related research

    Keywords: overlapping generations; last period effects; legislatures;

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    1. Ramon Marimon & Shyam Sunder, 1993. "Indeterminacy of equilibria in a hyperinflationary world: Experimental evidence," Economics Working Papers 25, Department of Economics and Business, Universitat Pompeu Fabra.
    2. Alesina, Alberto & Spear, Stephen, 1988. "An Overlapping Generations Model of Electoral Competition," Scholarly Articles 4553015, Harvard University Department of Economics.
    3. Kandori, Michihiro, 1992. "Social Norms and Community Enforcement," Review of Economic Studies, Wiley Blackwell, vol. 59(1), pages 63-80, January.
    4. Timothy Besley & Valentino Larcinese, 2011. "Working or shirking? Expenses and attendance in the UK Parliament," Public Choice, Springer, vol. 146(3), pages 291-317, March.
    5. Lim, Suk S & Prescott, Edward C & Sunder, Shyam, 1994. "Stationary Solution to the Overlapping Generations Model of Fiat Money: Experimental Evidence," Empirical Economics, Springer, vol. 19(2), pages 255-77.
    6. Kopecký, Petr & Scherlis, Gerardo, 2008. "Party Patronage in Contemporary Europe," European Review, Cambridge University Press, vol. 16(03), pages 355-371, July.
    7. Bender, Bruce & Lott, John R, Jr, 1996. " Legislator Voting and Shirking: A Critical Review of the Literature," Public Choice, Springer, vol. 87(1-2), pages 67-100, April.
    8. van der Heijden, E. C. M. & Nelissen, J. H. M. & Potters, J. J. M. & Verbon, H. A. A., 1998. "Transfers and the effect of monitoring in an overlapping-generations experiment," European Economic Review, Elsevier, vol. 42(7), pages 1363-1391, July.
    9. Güth, Werner & Kliemt, Hartmut & Ockenfels, Axel, 2000. "Fairness versus efficiency: An experimental study of (mutual) gift giving," SFB 373 Discussion Papers 2001,6, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    10. Dirk Engelmann & Martin Strobel, 2004. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," American Economic Review, American Economic Association, vol. 94(4), pages 857-869, September.
    11. Salant, David J., 1991. "A repeated game with finitely lived overlapping generations of players," Games and Economic Behavior, Elsevier, vol. 3(2), pages 244-259, May.
    12. Charles Bram Cadsby & Murray Frank, 1988. "Empirical Tests of Ricardian Equivalence," Working Papers 738, Queen's University, Department of Economics.
    13. Crain, W Mark & Leavens, Donald R & Tollison, Robert D, 1986. "Final Voting in Legislatures," American Economic Review, American Economic Association, vol. 76(4), pages 833-41, September.
    14. Lott, John R, Jr, 1990. "Attendance Rates, Political Shirking, and the Effect of Post-Elective Office Employment," Economic Inquiry, Western Economic Association International, vol. 28(1), pages 133-50, January.
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