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Repeated moral hazard and contracts with memory: A laboratory experiment

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  • Nieken, Petra
  • Schmitz, Patrick W.

Abstract

This paper reports data from a laboratory experiment on two-period moral hazard problems. The findings corroborate the contract-theoretic insight that even though the periods are technologically unrelated, due to incentive considerations principals can benefit from offering long-term contracts that exhibit memory.

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Bibliographic Info

Paper provided by Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems with number 372.

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Date of creation: Feb 2012
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Handle: RePEc:trf:wpaper:372

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Keywords: Repeated moral hazard; Sequential hidden actions; Laboratory experiment;

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Citations

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Cited by:
  1. Schmitz, Patrick W., 2012. "Job design with conflicting tasks reconsidered," MPRA Paper 36914, University Library of Munich, Germany.
  2. Filippin, A. & Crosetto, P., 2014. "A reconsideration of gender differences in risk attitudes," Working Papers, Grenoble Applied Economics Laboratory (GAEL) 2014-01, Grenoble Applied Economics Laboratory (GAEL).

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