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Co-employment of permanently and temporarily employed agents

  • Werner Güth

    (Max Planck Institute of Economics, Strategic Interaction Group)

  • Martin G. Kocher

    ()

    (University of Munich, Department of Economics)

  • Vera Popova

    (Max Planck Institute of Economics, Strategic Interaction Group)

One-shot interaction and repeated interaction often co-exist in the real world. We study possible behavioral effects of this co-existence in a principal-agent setting, in which a principal simultaneously employs a permanent and a temporary agent. Our experimental results indicate that there is "discrimination" between the two agents and that the available information for agents determines the extent of this discrimination, even though the theoretical solution of the game implies equal treatment of agents. Discrimination is, thus, a consequence of reciprocity. Agents that are discriminated against react negatively by withholding effort.

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File URL: http://www.wiwi.uni-jena.de/Papers/jerp2010/wp_2010_016.pdf
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Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2010-016.

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Date of creation: 16 Mar 2010
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Handle: RePEc:jrp:jrpwrp:2010-016
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