In: Journal of the European Economic Association, 2018, vol. 16, no. 2, p. 316-352
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In: Journal of Economic Behavior and Organization, 2019, vol. 166, p. 366-380
Work and trade relationships are often governed by relational contracts, in which incentives for cooperative action today stem from the prospective future benefits of the relationship. In this paper, we study how a lack of hard information about the costs of providing quality, and therefore about the financial consequences of actions, affects relational contracts in buyer-seller...
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In: The Journal of Law, Economics, and Organization, 2018, vol. 34, no. 2, p. 162-195
We design two laboratory experiments to analyze the causal effects of competition on step-by-step innovation. Innovations result from costly R&D investments and move technology up one step. Competition is inversely measured by the ex post rents for firms that operate at the same technological level, i.e. for neck-and-neck firms. First, we find that increased competition leads to a significant...
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In: Games and Economic Behavior, 2014, vol. 83, p. 1-23
Recent field evidence suggests a positive link between overconfidence and innovative activities. In this paper we argue that the connection between overconfidence and innovation is more complex than the previous literature suggests. In particular, we show theoretically and experimentally that different forms of overconfidence may have opposing effects on innovative activity. While...
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(Working Papers SES ; 522)
We conduct a field experiment with remote workers to assess potential adverse effects of monitoring. We find that monitoring reduces the average performance of workers, in particular among the intrinsically motivated workforce. Moreover, monitoring cultivates the average worker: There are fewer high performers and the variance in performance is significantly reduced. Importantly, we show that...
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In: Journal of the European Economic Association, 2018, p. 1-42
People's fairness preferences are an important constraint for what constitutes an acceptable economic transaction, yet little is known about how these preferences are formed. In this paper, we provide clean evidence that previous transactions play an important role in shaping perceptions of fairness. Buyers used to high market prices, for example, are more likely to perceive high prices as...
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In: The Leadership Quarterly, 2017, vol. 28, no. 1, p. 65-85
Research on leadership in economics has developed in parallel to the literature in management and psychology and links between the fields have been sparse. Whereas modern leadership scholars mostly focus on transformational and related leadership styles, economists have mainly emphasized the role of contracts, control rights, and incentives. We argue that both fields could profit from...
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In: Journal of Economic Perspectives, 2014, vol. 28, no. 3, p. 49-70
There is a growing body of evidence that many entrepreneurs seem to enter and persist in entrepreneurship despite earning low risk-adjusted returns. This has lead to attempts to provide explanations—using both standard economic theory and behavioral economics—for why certain individuals may be attracted to such an apparently unprofitable activity. Drawing on research in behavioral economics,...
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In: The American Economic Review, 2013, vol. 103, no. 4, p. 1325-1359
Authority and power permeate political, social, and economic life, but empirical knowledge about the motivational origins and consequences of authority is limited. We study the motivation and incentive effects of authority experimentally in an authority delegation game. Individuals often retain authority even when its delegation is in their material interest—suggesting that authority has...
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In: Econometrica, 2014, vol. 82, no. 6, p. 2005-2039
Philosophers, psychologists, and economists have long argued that certain decision rights carry not only instrumental value but may also be valuable for their own The ideas of autonomy, freedom, and liberty derive their intuitive appeal - partly - from an assumed positive intrinsic value of decision rights. Providing evidence for the existence of this intrinsic value and measuring its size,...
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