An Experimental Test of Career Concerns

Alexander Koch, Albrecht Morgenstern () and Philippe Raab ()
Additional contact information
Albrecht Morgenstern: Federal Ministry of Finance
Philippe Raab: Allianz Insurance Group

No 1405, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Holmström’s (1982/99) career concerns model has become an important workhorse for the analysis of agency issues in many fields. The underlying signal jamming argument requires players to use information in a Bayesian way – which may or may not reasonably approximate real-life decision makers’ behavior. Testing this theory with field data is difficult since typically little is known about the information that individuals base their decisions on, and this explains the dearth of empirical studies. We provide experimental evidence that the signal jamming mechanism works in a laboratory setting. Moreover, subjects' beliefs fit remarkably well requirements imposed by the Bayesian equilibrium concept.

Keywords: experiments; signal jamming; career concerns; reputation; incentives (search for similar items in EconPapers)
JEL-codes: C91 D83 L14 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2004-11
New Economics Papers: this item is included in nep-bec and nep-exp
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Published - published in: Journal of Economic Behavior and Organization , 2009, 72 (1), 571-588

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Related works:
Working Paper: An experimental test of career concerns (2004)
Working Paper: An experimental test of career concerns (2004)
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