Article1997

A SIMPLE PRINCIPAL‐AGENT EXPERIMENT FOR THE CLASSROOM

25 citations0/0 files storedEconomic Inquiry

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Experimental Behavioral Economics Studies Auction Theory and Applications Innovative Teaching Methodologies in Social Sciences

Abstract

In this note we describe a simple, flexible and instructive moral hazard experiment. It can be used in a variety of classes, including principles classes, to illustrate the basic incentive conflicts in principal‐agent interactions, the importance of information, and the power of reputational enforcement.

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1984The Evolution of Cooperation.1981The Role of Market Forces in Assuring Contractual Performance 1989Passions within reason: the strategic role of the emotions 1982Rational cooperation in the finitely repeated prisoners' dilemma 1986The Economics of Money, Banking and Financial Markets 1990Corporate culture and economic theory 1991Evolutionary Games in Economics 1990Modern industrial organization

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2004Decisions, uncertainty, and the brain. The science of neuroeconomics, Paul W. Glimcher; The MIT Press, Cambridge, MA, USA, 2003, pages 375, ISBN 0-262-07244-0 (hbk), $37.95

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