Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/80580
Authors: 
Danilov, Anastasia
Sliwka, Dirk
Year of Publication: 
2013
Series/Report no.: 
IZA Discussion Paper 7477
Abstract: 
We investigate whether incentive schemes signal social norms and thus affect behavior beyond their direct economic consequences. A principal-agent experiment is studied in which prior to contract choice principals are informed about past actions of other agents and thus have more information about norms of behavior. Compared to a setting with uninformed principals agents exert nearly 50% higher efforts under a fixed wage contract when an informed principal had chosen this contract. Apparently the informed principal's choice signals a norm not to exploit the trust which leads to more trustworthy behavior. This mechanism's robustness is explored in further experiments.
Subjects: 
social norms
contracts
incentives
signaling
experiments
JEL: 
D03
C91
D86
Document Type: 
Working Paper

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