In a pioneering approach towards the explanation of the phenomenon of “yes man” behavior in organizations, Prendergast [American Economic Review 83 (1993) 757–770] argued that incentive contracts in employment relationships generally make a worker distort his privately acquired information. This would imply that there is a trade-off between inducing a worker to exert costly effort and inducing ...

We examine how the probability of persuading an audience depends on resources expended by contending parties. We use a Bayesian approach whereby the audience makes inferences solely based on the evidence produced by the constants. We …nd conditions that yield the well-known additive contest success functions, including the logit function. We also …nd conditions that produce a generalized "di¤er...

I N T R O D U C T I O N In 1939 T. C. Barnes (1) reported experiments in which he replaced the inside and outside solutions bathing frog skin with D~O Ringer's (chloride). He observed large decreases in potential. In our initial experiments with D~O effects on frog skin the magnitude of the depression depended upon which side of the skin was exposed to D20: outside exposure gave the largest dep...

Individuals in many social networks imperfectly monitor other individuals’ network relationships. This paper shows that, in a model of a communication network, imperfect monitoring leads to the existence of many inefficient equilibria. Reasonable restrictions on actions or on beliefs about others’ actions can, however, eliminate many of these inefficient equilibria even with imperfect monitorin...

In a principal–multi-agent setting we investigate how optimal contracts should be modified under relative performance evaluation when agents collude. Agents may write side-contracts, which are not contingent on their effort choices but indirectly control them through sidetransfers. We show that the optimal collusion-proof contract is to introduce a ‘‘discriminatory policy’’ in the sense that th...

What is the best way of providing incentives to a team of agents? Agency theory has given a number of answers in the past three decades on the choice between collective and relative incentive provision. We present a broad overview of this rich literature through a simple model. While the early contributions emphasize the role of performance comparison and competition in motivating agents, more ...

The coadsorption of D2O and CO on Rh(100) under ultrahigh vacuum has been investigated by using infrared reflection absorption spectroscopy. The results show that the presence of D2O induces partial displacement of the CO molecules from linear to bridged configurations. The resulting spectra are very similar to those observed at equivalent CO coverages in an electrochemical environment. The spe...

In a matching model of firm formation with moral hazard, we characterize the equilibrium for economies with scarcity of capital and study the effects of redistributive taxation. We give necessary and sufficient conditions determining the equilibrium matching patterns, payoffs and interest rate. These depend only on aggregate wealth and the median wealth relative to the active population, compar...

Promoting investments in energy-saving technologies is an important means for achieving environmental goals. Empirical evidence on success conditions of associated policies, however, is scarce. Based on a survey among Dutch firms, this paper sets out to identify the factors that determine the investment behaviour of firms, their attitude towards various types of energy policy, and their respons...

Individuals in many social networks imperfectly monitor other individuals’ network relationships. This paper shows that, in a model of a communication network, imperfect monitoring leads to the existence of many ine cient equilibria. Reasonable restrictions on actions or on beliefs about others’ actions can, however, eliminate many of these ine cient equilibria even with imperfect monitoring. S...