Career concerns incentives: An experimental test

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  • Alexander Koch
  • Albrecht Morgenstern, German Federal Chancellery and IZA, Tyskland
  • Philippe Raab, Allianz Versicherungs-AG, Tyskland
  • Institut for Økonomi
Holmström's (1982/99) career concerns model has become a workhorse for analyzing agency issues in many elds. The underlying signal jamming argument requires players to use information in a Bayesian way, which is difficult to directly test with eld data: typically little is known about the information that individuals base their decisions on. Our laboratory experiment provides prima facie evidence: i) the signal jamming mechanism successfully creates incentives on the labor supply side; ii) decision errors take time to decrease; iii) while subjects’ average beliefs are remarkably consistent with play, a mild winner's curse arises on the labor demand side.
OriginalsprogEngelsk
TidsskriftJournal of Economic Behavior & Organization
Vol/bind72
Nummer1
Sider (fra-til)571-588
ISSN0167-2681
DOI
StatusUdgivet - 2009

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