IDEAS home Printed from https://ideas.repec.org/p/twi/respas/0015.html
   My bibliography  Save this paper

The Monotonicity Puzzle. An Experimental Investigation of Incentives Structures

Author

Listed:
  • Jeannette Brosig
  • Christian Lukas
  • Thomas Riechmann

Abstract

Non�monotone incentive structures, which � according to theory � are able to induce optimal behavior, are often regarded as empirically less relevant for labor relationships. Scientific attention is (therefore) confined to monotone if not linear contracts. This paper reports on experimental tests comparing non�monotone vs. monotone contracts in a simple dynamic agency model. The results demonstrate that selecting the non�monotone contract over of the monotone one is not only optimal from a theoretical point of view, but also remains preferable given the agents� observed behavior. However, roughly 50 per cent of the principals prefer the monotone contract.

Suggested Citation

  • Jeannette Brosig & Christian Lukas & Thomas Riechmann, 2006. "The Monotonicity Puzzle. An Experimental Investigation of Incentives Structures," TWI Research Paper Series 15, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
  • Handle: RePEc:twi:respas:0015
    as

    Download full text from publisher

    File URL: https://www.twi-kreuzlingen.ch/wp-content/uploads/2017/12/twi-rps-015-brosig-lukas-riechmann-2006-12.pdf
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:twi:respas:0015. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Urs Fischbacher (email available below). General contact details of provider: https://edirc.repec.org/data/twikrch.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.