Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/62234
Authors: 
Huck, Steffen
Müller, Wieland
Normann, Hans-Theo
Year of Publication: 
2000
Series/Report no.: 
Discussion Papers, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes 2000,39
Abstract: 
In this experiment, we analyze strategic delegation in a Cournot duopoly. Owners can choose among two different contracts which determine their managers' salaries. One contract simply gives managers incentives to maximize firm profits, while the second contract gives an additional sales bonus. Although theory predicts the second contract to be chosen, it is only rarely chosen in the experimental markets. This behavior is rational given that managers do not play according to the subgame perfect equilibrium prediction when asymmetric contracts are given.
Subjects: 
experimental economics
strategic delegation
managerial incentives
JEL: 
C72
C92
D21
D43
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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