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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. Antonio FILIPPIN & Paolo CROSETTO, 2014. "A Reconsideration of Gender Differences in Risk Attitudes," Departmental Working Papers 2014-01, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  2. Schmitz, Patrick W., 2012. "Job design with conflicting tasks reconsidered," MPRA Paper 36914, University Library of Munich, Germany.

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