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Career concerns incentives: an experimental test

[journal article]

Koch, Alexander K.; Morgenstern, Albrecht; Raab, Philippe

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Please use the following Persistent Identifier (PID) to cite this document:http://nbn-resolving.de/urn:nbn:de:0168-ssoar-293040

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Abstract 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.
Keywords reputation
Classification Basic Research, General Concepts and History of Economics
Free Keywords C91; D83; L14; Incentives; Career concerns; Signal jamming; Experiments
Document language English
Publication Year 2009
Page/Pages 571–588 p.
Journal Journal of Economic Behavior & Organization, 72 (2009) 1
DOI http://dx.doi.org/10.1016/j.jebo.2009.04.014
Status Postprint; peer reviewed
Licence PEER Licence Agreement (applicable only to documents from PEER project)