Discussion paper

DP8241 Repeated moral hazard and contracts with memory: A laboratory experiment

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.

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Citation

Schmitz, P and P Nieken (2011), ‘DP8241 Repeated moral hazard and contracts with memory: A laboratory experiment ‘, CEPR Discussion Paper No. 8241. CEPR Press, Paris & London. https://cepr.org/publications/dp8241