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dc.contributor.authorGächter, Simonen_US
dc.contributor.authorKessler, Estheren_US
dc.contributor.authorKönigstein, Manfreden_US
dc.description.abstractEfficiency under contractual incompleteness often requires voluntary cooperation in situations where self-regarding incentives for contractual compliance are present as well. Here we provide a comprehensive experimental analysis based on the gift-exchange game of how explicit and implicit incentives affect cooperation. We first show that there is substantial cooperation under non-incentive compatible contracts. Incentive-compatible contracts induce best-reply effort and crowd out any voluntary cooperation. Further experiments show that this result is robust to two important variables: experiencing Trust contracts without any incentives and implicit incentives coming from repeated interaction. Implicit incentives have a strong positive effect on effort only under non-incentive compatible contracts.en_US
dc.publisherCEDEX Nottinghamen_US
dc.relation.ispartofseriesCeDEx discussion paper series 2011-06en_US
dc.subject.keywordprincipal-agent gamesen_US
dc.subject.keywordgift-exchange experimentsen_US
dc.subject.keywordincomplete contracts, explicit incentivesen_US
dc.subject.keywordimplicit incentivesen_US
dc.subject.keywordrepeated gamesen_US
dc.titleThe roles of incentives and voluntary cooperation for contractual complianceen_US
dc.typeWorking Paperen_US
Appears in Collections:CeDEx Discussion Paper Series, The University of Nottingham

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