The CEPR International Virtual Organization Economics Seminars (CIVOE-Seminars) is aimed at drawing together organizational economics and personnel economics speakers during this time when our university and NBER conferences are occurring less frequently. We are also taking the opportunity to make this a truly international collection of colleagues and speakers. We will meet via a webinar bi-weekly on Mondays at 6pm CEST. Further details about CIVOE can be found here: https://sites.google.com/view/cepr-ivoes.
Our fourth CIVOE seminar will be on Monday 1st June 2020 at 6pm CEST / 5pm London / 12pm East Coast / 11am Chicago / 9am West Coast. Our speaker will be George Georgiadis (Kellogg School of Management, Northwestern University) presenting on “A/B Contracts” with Michael Powell (Kellogg School of Management, Northwestern University).
Title: A/B Contracts
Authors: George Georgiadis and Michael Powell (Kellogg School of Management, Northwestern University).
Abstract:
This paper aims to improve the practical applicability of the classic theory of incentive contracts under moral hazard. We establish conditions under which the information provided by an A/B test of incentive contracts is sufficient for answering the question of how best to improve a status quo incentive contract, given a priori knowledge of the agent’s monetary preferences. We assess the empirical relevance of this result using data from DellaVigna and Pope’s (2017) study of a variety of incentive contracts. Finally, we discuss how our framework can be extended to incorporate additional considerations beyond those in the classic theory.
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