Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/163011
Authors: 
Dong, Lu
Falvey, Rod
Luckraz, Shravan
Year of Publication: 
2016
Series/Report no.: 
CeDEx Discussion Paper Series 2016-10
Abstract: 
We propose and experimentally test a mechanism for a class of principal-agent problems in which agents can observe each others' efforts. In this mechanism each player costlessly assigns a share of the pie to each of the other players, after observing their contributions, and the final distribution is determined by these assignments. We show that cooperation can be achieved under this simple mechanism and, in a controlled laboratory experiment, we find that players use a proportional rule to reward others in most cases and that the players' contributions improve substantially and almost immediately with 80% of players contributing fully.
Subjects: 
mechanism design
experimental economics
fairness
distributive justice
JEL: 
D62
H41
C79
C90
D63
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.