Design a contract! : A simple principal-agent problem as a classroom experiment

We present a simple classroom principal-agent experiment that can effectively be used as a teaching device to introduce important concepts of organizational economics and contracting. In a first part, students take the role of a principal and design a contract that consists of a fixed payment and an incentive component. In the second part, students take the role of agents and decide on an effort level. The experiment can be used to introduce students to the concepts of efficiency, incentive compatibility, outside options and participation constraints, the Coase theorem, and fairness and reciprocity in contracting. --Classroom experiments,post-contractual opportunism,incentive contracts,efficiency,reciprocity,Coase theorem

The Choice of the Agenda in Labor Negotiations: Efficiency and Behavioral Considerations

The labor economics literature has shown that the "efficient bargaining" model, in which wage and employment are negotiated simultaneously, is less frequently used on unionized markets than the less efficient "right-to-manage" model, in which wage is determined via bargaining and employment determined subsequently and unilaterally by the firm. This paper reports an experiment in which the choice of the bargaining agenda is endogenous within a noncooperative game. We find that participants show a preference for decision authority and choose single-issue bargaining in most cases even though efficiency is lower than in multiissue bargaining. Furthermore, multi-issue bargaining induces unions to offer smaller payoff shares and leads to a higher conflict rate than in a single-issue bargaining.bargaining agenda; efficient contracts; right-to-manage; decision authority; experiments

The Choice of the Agenda in Labor Negotiations: efficiency and behavioral considerations

The labor economics literature has shown that the “efficient bargaining” model, in which wage and employment are negotiated simultaneously, is less frequently used on unionized markets than the less efficient “right-to-manage” model, in which wage is determined via bargaining and employment determined subsequently and unilaterally by the firm. This paper reports an experiment in which the choice of the bargaining agenda is endogenous within a noncooperative game. We find that participants show a preference for decision authority and choose single-issue bargaining in most cases even though efficiency is lower than in multi-issue bargaining. Furthermore, multi-issue bargaining induces unions to offer smaller payoff shares and leads to a higher conflict rate than in a single-issue bargaining.bargaining agenda; decision authority; efficient contract; experiment; right to manage

The Roles of Incentives and Voluntary Cooperation for Contractual Compliance

Efficiency under contractual incompleteness often requires voluntary cooperation in situations where self-regarding incentives for contractual compliance are present as well. Here we provide a comprehensive experimental analysis based on the gift-exchange game of how explicit and implicit incentives affect cooperation. We first show that there is substantial cooperation under non-incentive compatible contracts. Incentive-compatible contracts induce best-reply effort and crowd out any voluntary cooperation. Further experiments show that this result is robust to two important variables: experiencing Trust contracts without any incentives and implicit incentives coming from repeated interaction. Implicit incentives have a strong positive effect on effort only under non-incentive compatible contracts.principal-agent games, gift-exchange experiments, incomplete contracts, explicit incentives, implicit incentives, repeated games, separability, experiments

Ultracold electron bunch generation via plasma photocathode emission and acceleration in a beam-driven plasma blowout

Beam-driven plasma wakefield acceleration using low-ionization-threshold gas such as Li is combined with laser-controlled electron injection via ionization of high-ionization-threshold gas such as He. The He electrons are released with low transverse momentum in the focus of the copropagating, nonrelativistic-intensity laser pulse directly inside the accelerating or focusing phase of the Li blowout. This concept paves the way for the generation of sub-μm-size, ultralow-emittance, highly tunable electron bunches, thus enabling a flexible new class of an advanced free electron laser capable high-field accelerator. © 2012 American Physical Society

Design considerations for the use of laser-plasma accelerators for advanced space radiation studies

We present design considerations for the use of laser-plasma accelerators for mimicking space radiation and testing space-grade electronics. This novel application takes advantage of the inherent ability of laser-plasma accelerators to produce particle beams with exponential energy distribution, which is a characteristic shared with the hazardous relativistic electron flux present in the radiation belts of planets such as Earth, Saturn and Jupiter. Fundamental issues regarding laser-plasma interaction parameters, beam propagation, flux development, and experimental setup are discussed

Efficiency and behavioral considerations in labor negotiations

International audienceExperimental literature has shown that social preferences influence how individuals bargain and make sharing decisions. It usually considers situations in which individuals negotiate on a single issue. This paper explores a different environment and reports on an experiment based on a non-cooperative game in which the choice of the bargaining agenda is endogenous. We fnd that firms reveal a strong preference for single-issue bargaining although the subgame perfect equilibrium predicts the choice of the multi-issue bargaining. In multi-issue bargaining unions offer smaller relative payoff shares to firms than in single-issue bargaining and this leads to a higher conflict rate than in a single-issue bargaining. Social preferences and a concern for relative payoffs support this preference for a restricted bargaining agenda but they induce a loss of efficiency

The Choice of the Agenda in Labor Negotiations: Efficiency and Behavioral Considerations

IZA Discussion paper n° 1762The labor economics literature has shown that the "efficient bargaining" model, in which wage and employment are negotiated simultaneously, is less frequently used on unionized markets than the less efficient "right-to-manage" model, in which wage is determined via bargaining and employment determined subsequently and unilaterally by the firm. This paper reports an experiment in which the choice of the bargaining agenda is endogenous within a noncooperative game. We find that participants show a preference for decision authority and choose single-issue bargaining in most cases even though efficiency is lower than in multiissue bargaining. Furthermore, multi-issue bargaining induces unions to offer smaller payoff shares and leads to a higher conflict rate than in a single-issue bargaining

Efficiency and behavioral considerations in labor negotiations

Experimental literature has shown that social preferences influence how individuals bargain and make sharing decisions. It usually considers situations in which individuals negotiate on a single issue. This paper explores a different environment and reports on an experiment based on a non-cooperative game in which the choice of the bargaining agenda is endogenous. We fnd that firms reveal a strong preference for single-issue bargaining although the subgame perfect equilibrium predicts the choice of the multi-issue bargaining. In multi-issue bargaining unions offer smaller relative payoff shares to firms than in single-issue bargaining and this leads to a higher conflict rate than in a single-issue bargaining. Social preferences and a concern for relative payoffs support this preference for a restricted bargaining agenda but they induce a loss of efficiency.Bargaining agenda; Efficient contracts; Right-to-manage; Social preferences; Experiment