Arbeitspapier
Adding a Stick to the Carrot? The Interaction of Bonuses and Fines
In this paper we report on a principal-agent experiment where the principal can choose whether to rely on an unenforcable bonus contract or to combine the bonus contract with a fine if the agent's effort falls below a minimum standard. We show that most principals do not use the fine and that the pure bonus contract is more efficient than the combined contract. Our experiment suggests that principals who are less fair are more likely to choose a combined contract and less likely to actually pay the announced bonus. This offers a new explanation for why explicit and implicit incentives are substitutes rather than complements.
- Sprache
-
Englisch
- Erschienen in
-
Series: SFB/TR 15 Discussion Paper ; No. 197
- Klassifikation
-
Wirtschaft
- Thema
-
moral hazard
bonus contract
implicit incentives
fairness
incentives
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Fehr, Ernst
Schmidt, Klaus M.
- Ereignis
-
Veröffentlichung
- (wer)
-
Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
- (wo)
-
München
- (wann)
-
2007
- DOI
-
doi:10.5282/ubm/epub.13355
- Handle
- URN
-
urn:nbn:de:bvb:19-epub-13355-1
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Fehr, Ernst
- Schmidt, Klaus M.
- Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
Entstanden
- 2007
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