Working Paper: CEPR ID: DP8241
Authors: Petra Nieken; Patrick W. Schmitz
Abstract: This paper reports data from a laboratory experiment on two-period moral hazard problems. The findings corroborate the contract-theoretic insight that even though the periods are technologically unrelated, due to incentive considerations principals may prefer to offer contracts with memory.
Keywords: laboratory experiment; repeated moral hazard; sequential hidden actions
JEL Codes: D82; J33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| type A wage schemes (J33) | principals' preferences (D71) |
| type B wage schemes (J33) | principals' preferences (D71) |
| za = 40 (C29) | agents' effort (L85) |
| za = 25, 30, 35 (C29) | agents' effort (L85) |
| zb = 50 (C29) | agents' first-period effort (D29) |
| zb = 60, 70, 80 (C29) | agents' first-period effort (D29) |
| first-period success (Y20) | second-period effort (type B) (Y50) |