Department of Economics and Business Economics

Career concerns incentives: An experimental test

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

  • Alexander Koch
  • Albrecht Morgenstern, German Federal Chancellery and IZA, 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 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.
Original languageEnglish
JournalJournal of Economic Behavior & Organization
Pages (from-to)571-588
Publication statusPublished - 2009

    Research areas

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

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