Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/20703
Authors: 
Koch, Alexander K.
Morgenstern, Albrecht
Raab, Philippe
Year of Publication: 
2004
Series/Report no.: 
IZA Discussion paper series 1405
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: 
L14
D83
C91
Document Type: 
Working Paper

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