Career concerns incentives: An experimental test

Alexander Koch, Albrecht Morgenstern and Philippe Raab ()
Additional contact information
Philippe Raab: School of Economics and Management, University of Aarhus, Denmark, Postal: 8000 Aarhus C, Denmark

Economics Working Papers from Department of Economics and Business Economics, Aarhus University

Abstract: Holmström’s (1982/99) career concerns model has become a workhorse for analyzing agency issues in many fields. The underlying signal jamming argument requires players to use information in a Bayesian way, which is difficult to directly test with field 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: Incentives; Reputation; Career concerns; Signal jamming; Experiments (search for similar items in EconPapers)
JEL-codes: C91 D83 L14 (search for similar items in EconPapers)
Pages: 37
Date: 2009-01-09
New Economics Papers: this item is included in nep-cta, nep-exp and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Journal Article: Career concerns incentives: An experimental test (2009)
Working Paper: Career concerns incentives: An experimental test (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:aah:aarhec:2009-01

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