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Title:An experimental test of career concerns PDF Logo
Authors:Morgenstern, Albrecht
Koch, Alexander Karl
Raab, Philippe
Issue Date:2004
Series/Report no.:Bonn econ discussion papers 2004,20
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.
Subjects:incentives
reputation
career concerns
signal jamming
experiments
JEL:D83
L14
C91
Document Type:Working Paper
Appears in Collections:Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn

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