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dc.contributor.authorSautmann, Anjaen_US
dc.description.abstractThis paper experimentally tests the predictions of a principal-agent model in which the agent has biased beliefs about his ability. Overconfident workers are found to earn lower wages than underconfident ones because they overestimate their expected payoff, and principals adjust their offers accordingly. Moreover, the profit-maximizing contract distorts effort by varying incentives according to self-confidence, although only the most successful principals use this strategy. These findings have implications for the labor market; in particular, self-confidence is often correlated with gender, implying that principals would prefer to hire men over women simply because they are more overconfident.en_US
dc.publisherBrown University, Department of Economics Providence, RIen_US
dc.relation.ispartofseriesWorking Paper, Brown University, Department of Economics 2011-10en_US
dc.titleContracts for agents with biased beliefs: Some theory and an experimenten_US
dc.typeWorking Paperen_US
Appears in Collections:Working Papers, Department of Economics, Brown University

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