Smart contract-enabled blockchains allow building decentralized applications in which mutually-distrusted parties can work together. Recently, oracle services emerged to provide these with real-world data feeds. Unfortunately, capabilities have been used for malicious purposes under what is called criminal smart contracts. A few works explored this dark side and showed a variety of such attacks...

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 ...

While some argue that incomplete incentive contracts facilitate the self-enforcement of informal dealings, other authors submit that they substitute for or “crowd out” social norms supporting informal arrangements. We use experimental evidence to test these theories by manipulating the extent to which individuals transact repeatedly and the level of contract costs. We find that, by enforcing co...

We show that concerns for fairness may have dramatic consequences for the optimal provision of incentives in a moral hazard context. Incentive contracts that are optimal when there are only selfish actors become inferior when some agents are concerned about fairness. Conversely, contracts that are doomed to fail when there are only selfish actors provide powerful incentives and become superior ...

This article is devoted to adverse selection problems in which individual private information is a whole utility function and cannot be reduced to some nite-dimensional parameter. In this case, incentive compatibility conditions can be conveniently expressed using some abstract convexity notions arising in Mass Transfer Theory 8]. After this characterization is provided, an existence result of ...

Allowing CEOs to hedge the risk in the compensation contracts their …rms give them has been controversial because such hedging permits the executives to undo some of the incentive e¤ects of those contracts; it also results in a divergence between the compensation …rms pay their senior executives and the compensation those executives e¤ectively receive. We analyze the personal hedging activities...

Service Oriented Enterprises (SOEs) are subject to constant change and variation. In this paper, the changes are considered from an economic perspective based on service culture notion. Once a change is implemented, the costs of some member services may increase, whereas the costs of some other services may reduce. We construct a game theoretic model trying to capture the possible conflicting i...

Abstract We study the effects on performance of incentives framed as gains or losses, well effort channels through which individuals increase performance. also explore potential spill-over a non-incentivised activity. Subjects participated in medically real-effort task under one three contracts, varying type incentive received: (1) no incentive; (2) gain; (3) loss. find that improved similarly ...