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

Author

Listed:
  • Leif Helland

    (BI Norwegian Business School)

  • Jon Hovi

    (University of Oslo and CICERO)

  • Lars Monkerud

    (BI Norwegian Business School)

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.

Suggested Citation

  • Leif Helland & Jon Hovi & Lars Monkerud, 2012. "Can exit prizes induce lame ducks to shirk less? Experimental evidence," European Journal of Government and Economics, Europa Grande, vol. 1(2), pages 106-125, December.
  • Handle: RePEc:egr:ejge00:v:1:i:2:p:106-125
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    References listed on IDEAS

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    More about this item

    Keywords

    overlapping generations; last period effects; legislatures;

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • H4 - Public Economics - - Publicly Provided Goods

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