Department of Economics and Business Economics

Career concerns incentives: An experimental test

Research output: Working paperResearch

  • Alexander Koch
  • Albrecht Morgenstern, German Federal Chancellery, Germany
  • Philippe Raab, Allianz Versicherungs-AG, Germany
  • School of Economics and Management
Holmström's (1982/99) career concerns model has become a workhorse for analyzing agency
issues in many fields. The underlying signal jamming argument requires players to use information
in a Bayesian way, which is difficult to directly test with field 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.
Original languageEnglish
Place of publicationAarhus
PublisherAarhus Universitetsforlag
Number of pages37
Publication statusPublished - 2009

    Research areas

  • Incentives, Reputation, Career concerns, Signal jamming, Experiments

See relations at Aarhus University Citationformats

ID: 14697341