An Experimental Test of Career Concerns

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An Experimental Test of Career Concerns

Author Info

Koch, Alexander K. (University of London and IZA Bonn)
Morgenstern, Albrecht (Federal Ministry of Finance and IZA Bonn)
Raab, Philippe () (Bonn Graduate School of Economics and IZA Bonn)

Additional information is available for the following registered author(s):

Alexander Karl Koch

Abstract

Holmström’s (1982/99) career concerns model has become an important workhorse for the analysis of agency issues in many fields. The underlying signal jamming argument requires players to use information in a Bayesian way – which may or may not reasonably approximate real-life decision makers’ behavior. Testing this theory with field data is difficult since typically little is known about the information that individuals base their decisions on, and this explains the dearth of empirical studies. We provide experimental evidence that the signal jamming mechanism works in a laboratory setting. Moreover, subjects' beliefs fit remarkably well requirements imposed by the Bayesian equilibrium concept.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1405.

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Length: 28 pages
Date of creation: Nov 2004
Date of revision:
Handle: RePEc:iza:izadps:dp1405

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Paper
- Alexander K. Koch & Albrecht Morgenstern & Philippe Raab, 2004. "An experimental test of career concerns," Royal Holloway, University of London: Discussion Papers in Economics 04/31, Department of Economics, Royal Holloway University of London, revised Nov 2004. [Downloadable!]
- Alexander K. Koch & Albrecht Morgenstern & Philippe Raab, 2004. "An experimental test of career concerns," Bonn Econ Discussion Papers bgse20_2004, University of Bonn, Germany. [Downloadable!]

Find related papers by JEL classification:
C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

This paper has been announced in the following NEP Reports:

NEP-ALL-2004-12-02 (All new papers)
NEP-BEC-2004-12-02 (Business Economics)
NEP-EXP-2004-12-02 (Experimental Economics)

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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Other versions:
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- Simon Gaechter & Armin Falk, . "Reputation and Reciprocity: Consequences for the Labour Relation," IEW - Working Papers iewwp019, Institute for Empirical Research in Economics - IEW. [Downloadable!]
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