Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/316461 
Year of Publication: 
2019
Citation: 
[Journal:] Islamic Economic Studies (IES) [ISSN:] 2411-3395 [Volume:] 27 [Issue:] 1 [Year:] 2019 [Pages:] 53-64
Publisher: 
Emerald, Bingley
Abstract: 
Purpose The purpose of this paper is to examine whether reputation element affects the decision relative performance of trust, bonus and incentive contracts using social laboratory experiments. Design/methodology/approach The study conducts the following lab experiments bonus-incentive treatment without reputation, bonus-incentive treatment with reputation and trust-incentive treatment with reputation. Findings The study finds that the reputation and fairness concerns, in contrast to self-interest, may have a decisive impact on the actual and optimal choices in the reciprocity-based contracts. The principal pays higher salaries in the bonus contract as compared to an incentive contract. Originality/value The study contributes to the behavioral economic literature in the following dimensions. The existing literature on lab experiments considers a bonus contract as better than the debt contract; however, it does not consider the trust contract better than the debt contract.
Subjects: 
Self-Interest
Reciprocity
Reputation
Debt contract
Equity contract
JEL: 
B52
C72
C72
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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