Suchergebnisse

Incentives often fail in inducing economic agents to engage in a desirable activity; implementability is restricted. What restricts implementability? When does re-organization help to overcome this restriction? This paper shows that any restriction of implementability is caused by an identifi cation problem. It also describes organizations that can solve this identifi cation problem and provides conditions under which such organisations exist. Applying the findings to established and new moral hazard models yields insights into optimal organization design, uncovers the reason why certain organization designs, such as advocacy or specialization, overcome restricted implementability, and formalizes a wide-spread type of multi-tasking problem.

Consider a principal-agent relationship in which more effort by the agent raises the likelihood of success. Does rewarding success, i.e., paying a bonus, increase effort in this case? I find that bonuses have not only an incentive but also an income effect. Overall, bonuses paid for success may well reduce effort and hence the probability of success. I also identify conditions under which the income effect dominates the incentive effect, and single out the hazard-rate of effort as a crucial determinant of this trade-off. -- Bonus ; premium ; incentives ; income effect ; moral hazard

What happens if A wants to buy a good or service from B, but not all relevant characteristics can be fixed in a contract? This book gives a non-technical overview of various models dealing with this situation. Particular emphasis is put on the problem that the service includes various tasks and B is paid by a performance measure (signal). As a result, B might choose the wrong allocation of effort between tasks. Of course, the wrong allocation entails costs. A method to calculate these costs is suggested and it is explored how and when these costs occur. Some performance measures seem to be less prone to misallocation such as measures of firm performance. Consequently, one expects more use of firm performance measures when misallocation can be a problem. This hypothesis is examined empirically

A standard hidden information model is considered to study the influence of the a priori productivity distribution on the optimal contract. A priori more productive (hazard rate dominant) agents work less, enjoy lower rents, but generate a higher expected surplus.

What happens if A wants to buy a good or service from B, but not all relevant characteristics can be fixed in a contract? This book gives a non-technical overview of various models dealing with this situation. Particular emphasis is put on the problem that the service includes various tasks and B is paid by a performance measure (signal). As a result, B might choose the wrong allocation of effort between tasks. Of course, the wrong allocation entails costs. A method to calculate these costs is suggested and it is explored how and when these costs occur. Some performance measures seem to be less prone to misallocation such as measures of firm performance. Consequently, one expects more use of firm performance measures when misallocation can be a problem. This hypothesis is examined empirically. TOC:Introduction.- Effort Misallocation and the Value of Signals.- Firm Performance Measures.- Statistical Model and Empirical Evidence.- Conclusion

Anecdotal, empirical, and experimental evidence suggests that offering extrinsic rewards for certain activities can reduce people's willingness to engage in those activities voluntarily. We propose a simple rationale for this 'crowding out' phenomenon, using standard economic arguments. The central idea is that the potential to earn rewards in return for an activity may create incentives to play 'hard to get' in an effort to increase those rewards. We discuss two specic contexts in which such incentives arise. In the first, refraining from the activity causes others to attach higher value to it because it becomes scarce. In the second, restraint serves to conceal the actor's intrinsic motivation. In both cases, not engaging in the activity causes others to offer larger rewards. Our theory yields the testable prediction that such effects are likely to occur when a motivated actor enjoys a sufficient degree of 'market power.'

What is the motivational effect of imposing a minimum effort requirement? Agents may no longer exert voluntary effort but merely meet the requirement. Here, we examine how such hidden costs of control change when control is considered legitimate. We study a principal-agent model where control signals the expectations of the principal and the agent meets these expectations because he is guilt-averse. We conjecture that control is more likely to be considered legitimate (i) if it is not exclusively aimed at a specific agent or (ii) if it protects the endowment of the principal. Given the conjecture, the model predicts that hidden costs are lower when one of the two conditions is met. We experimentally test these predictions and find them confirmed. -- Moral hazard ; intrinsic motivation ; guilt aversion

We investigate a team setting in which workers have different degrees of commitment to the outcome of their work. We show that if there are complementarities in production and if the team manager has some information about team members, interventions that the manager undertakes in order to assure certain efforts may have destructive effects: they can distort the way workers perceive their fellow workers and they may also lead to a reduction of effort by those workers that care most about output. Moreover, interventions may hinder the development of a cooperative organizational culture in which workers trust each other. Thus, our framework provides some first insights into the costs and benefits of interventions in teams. It identifies that team governance is driven by the importance of tasks that cannot be monitored. The more important these tasks, the more likely it is that teams are empowered. -- Team work ; incentives ; informed principal ; intrinsic motivation

Abstract
Food labels are supposed to quickly inform consumers about the nutritional values of products. We provide evidence that in a system where labels are voluntary, they are systematically distorted. The probability of finding a label on a product of the category with the highest nutritional value is 51 percentage points larger than in the lowest category.

In zahlreichen Experimenten wurde beobachtet, dass Menschen bewusst von auszahlungsmaximierenden Entscheidungen - von Ökonomen lange als einzig rationales Verhalten angesehen - abweichen. Diese Beobachtungen begründeten das Forschungsfeld Behavioral Economics. Diese Dissertation stellt vier experimentelle Studien vor, die etablierte verhaltensökonomische Konzepte untersuchen und ihre Implikationen bei der Ablehnung paternalistischer Hilfe, der Bereitschaft zur Intervention in Teams, Diskriminierung, Misstrauen und Mogelei testen. Die Ergebnisse legen nahe, dass Ablehnung paternalistischer Hilfe durch psychologische Motive motiviert ist. Die Ergebnisse zur Intervention in Teams stimmen mit der Regrettheorie (Loomes und Sugden, 1982; Bell, 1982) überein: Vorgesetzte sind weniger (statistisch insignifikant) bereit, in Entscheidungen eines Mitarbeiters einzugreifen, wenn sie erwarten, dies ex-post zu bereuen. In der Studie über Diskriminierung scheint individuelle Ehrlichkeit mit dem Grad des Misstrauens gegenüber anderen übereinstimmt: Ehrliche Personen erwarten weniger Unehrlichkeit als unehrliche Personen. Zudem wirft diese Dissertation die Idee auf, ob ,other-regarding' Präferenzen von sozialer Gruppenzugehörigkeit geprägt sein können. In der Studie zur Diskriminierung in Minimalgruppen wird festgestellt, dass diskriminierende Vorstellung über andere als Quelle für Diskriminierung in Minimalgruppen keine Rolle spielen. Dies kann zu der Vermutung führen, dass, falls in minimalen Gruppen diskriminiert wird, die In-Gruppe gegenüber der Out-Gruppe begünstigen werden soll. Eine solche gruppenzugehörigkeitsabhängige ,Other-regardedness' scheint bereits bei Kindern vorhanden zu sein, wie Ergebnisse des Kinderexperiments nahelegen: Sie scheinen mehr für Freunde und Geschwister zu mogeln als für Fremde.. - In numerous experiments, it has been observed that people consciously deviate from the payoff-maximizing decisions which economists long saw as the ultimo ratio of a rational agent. These observed anomalies led to the new research domain, Behavioral Economics. This dissertation presents four experimental studies which consider established behavioral economic concepts and test their implications in the context of rejecting paternalistic help, the willingness to intervene in teams, discrimination, mistrust and cheating.The results suggest that for rejecting paternalistic help, psychological benefits serve as a suitable motivation. Regarding the intervention in teams, the results are in line with the regret theory (Loomes and Sugden, 1982; Bell, 1982): supervisors are less (though statistically insignificantly) willing to intervene with their worker's decision, when the supervisors anticipate that they may ex-post regret their intervention. Further, in the presented study on discrimination, it was found that the individual honesty behavior corresponds to the level of mistrust that subjects exhibit towards others: honest subjects expect less dishonesty by others than dishonest subjects. Last, the proposed dissertation raises the idea that other-regarding preferences may dependent on social group membership. In the study on discrimination in minimal groups presented here, it is found that discriminating beliefs as a source for discrimination do not play a role in minimal groups. The absence of discriminating beliefs may lead to the conjecture that if subjects discriminate in minimal groups, they may simply prefer to favor their in-group more than their out-group. Such group membership-dependent other-regardedness may be already present in young children, as is suggested by the results from the field experiment with children presented here: they are found to cheat more for friends and siblings than they do for strangers.

Abstract
How can a manager influence workers' activity, while knowing little about it? This paper examines a situation where production requires several tasks, and the manager wants to direct production to achieve a preferred allocation of effort across tasks. However, the effort that is required for each task cannot be observed, and the production result is the only indicator of worker activity. This paper illustrates that in this situation, the manager cannot implement the preferred allocation with a single worker. On the other hand, the manager is able to implement the preferred allocation by inducing a game among several workers. Gains to workers from collusion may be eliminated by an ability-dependent, but potentially inefficient, task assignment. These findings provide a new explanation for the division of labor, and bureaucratic features such as ``over"-specialization and ``wrong" task allocation.