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

Listed author(s):
  • Leif Helland

    (BI Norwegian Business School)

  • Jon Hovi

    (University of Oslo and CICERO)

  • Lars Monkerud

    (BI Norwegian Business School)

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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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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  1. 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.
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  7. 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.
  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. 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.
  10. Kopecký, Petr & Scherlis, Gerardo, 2008. "Party Patronage in Contemporary Europe," European Review, Cambridge University Press, vol. 16(03), pages 355-371, July.
  11. 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 255-277.
  12. 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.
  13. Michihiro Kandori, 1992. "Social Norms and Community Enforcement," Review of Economic Studies, Oxford University Press, vol. 59(1), pages 63-80.
  14. Crain, W Mark & Leavens, Donald R & Tollison, Robert D, 1986. "Final Voting in Legislatures," American Economic Review, American Economic Association, vol. 76(4), pages 833-841, September.
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