DP8241 Repeated moral hazard and contracts with memory: A laboratory experiment
|Author(s):||Petra Nieken, Patrick W. Schmitz|
|Publication Date:||February 2011|
|Keyword(s):||Laboratory experiment, Repeated moral hazard, Sequential hidden actions|
|Programme Areas:||Industrial Organization|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=8241|
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.