@techreport{Kritikos2005Indenture,
abstract = {How can a principal (an agent) ensure that an agent (a principal) will work (pay up), if
payment (work) precedes work (payment)? When a banknote is torn in two, each part
is by itself worthless. A principal can pre-commit to payment-on-delivery, by tearing a
banknote and giving the agent the first half as "prepayment"; the agent receives the
completing half upon delivery of the service. This contract design is known as
"indenture". It is self-enforcing and incentive-compatible. This paper experimentally
tests the efficacy of the "indenture game" and its implications for cooperation in oneshot
environments. We find that cooperation rates are high and stable over time. Its
efficacy is moderated by expected losses due to the existence of uncooperative types.},
author = {Alexander S. Kritikos and Jonathan H. W. Tan},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {C91; J41; D64; 330; Cooperation; Experiment; Contracts; Indenture; Reciprocity; Agency Theory; Spieltheorie; Anreizvertrag; Experiment; Theorie},
language = {eng},
number = {241},
title = {Indenture as a Commitment Device in Self-Enforced Contracts: An Experimental Test},
type = {Diskussionspapiere / Europa-Universit\"{a}t Viadrina Frankfurt (Oder), Wirtschaftswissenschaftliche Fakult\"{a}t},
url = {http://hdl.handle.net/10419/23812},
year = {2005}
}
