Contracts as reference points - Experimental evidence

Details

Serval ID
serval:BIB_729144CBF3F5
Type
Article: article from journal or magazin.
Collection
Publications
Institution
Title
Contracts as reference points - Experimental evidence
Journal
American Economic Review
Author(s)
Fehr  E., Hart  O., Zehnder  C.
ISSN
0002-8282
Publication state
Published
Issued date
04/2011
Peer-reviewed
Oui
Volume
101
Number
2
Pages
493-525
Language
english
Abstract
Hart and John Moore (2008) introduce new behavioral assumptions that can explain long-term contracts and the employment relation. We examine experimentally their idea that contracts serve as reference points. The evidence confirms the prediction that there is a trade-off between rigidity and flexibility. Flexible contracts-which would dominate rigid contracts under standard assumptions-cause significant shading in ex post performance, while under rigid contracts much less shading occurs. The experiment appears to reveal a new behavioral force: ex ante competition legitimizes the terms of a contract, and aggrievement and shading occur mainly about outcomes within the contract.
Keywords
Gift exchange, Labor-market, Reciprocity, Competition, Fairness, Preferences, Ownership, Behavior, Firm
Web of science
Create date
18/12/2009 12:47
Last modification date
21/08/2019 6:14
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