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

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

Chinese companies in Switzerland

In recent years, some of China’s leading firms have made headlines with their European expansion, by either opening new facilities or by acquiring or merging with significant enterprises in Europe. The goal of this paper is to contribute to the existing literature by examining Chinese enterprises expanding into Switzerland. The study also allows some conclusions for Chinese companies entering Central and Eastern Europe. We analyze via interviews the motivations of Chinese companies to expand into Switzerland as well as their behavior and the impediments in their internationalization process. Our findings show that Chinese companies fail to take advantage of certain benefits of western economies (such as open information and stable rule of law). To move forward efficiently, they should develop competence in dealing systematically with readily available market information, building professional networks that recognize a separation between business life and personal life, and managing their Chinese and foreign employees in the foreign cultural environment

Specific neural correlates of successful learning and adaptation during social exchanges

Cooperation and betrayal are universal features of social interactions, and knowing who to trust is vital in human society. Previous studies have identified brain regions engaged by decision making during social encounters, but the mechanisms supporting modification of future behaviour by utilizing social experience are not well characterized. Using functional magnetic resonance imaging (fMRI), we show that cooperation and betrayal during social exchanges elicit specific patterns of neural activity associated with future behaviour. Unanticipated cooperation leads to greater behavioural adaptation than unexpected betrayal, and is signalled by specific neural responses in the striatum and midbrain. Neural responses to betrayal and willingness to trust novel partners both decrease as the number of individuals encountered during repeated social encounters increases. We propose that, as social groups increase in size, uncooperative or untrustworthy behaviour becomes progressively less surprising, with cooperation becoming increasingly important as a stimulus for social learning. Effects on reputation of non-trusting decisions may also act to drive pro-social behaviour. Our findings characterize the dynamic neural processes underlying social adaptation, and suggest that the brain is optimized to cooperate with trustworthy partners, rather than avoiding those who might betray us

Investigating the effectiveness and cost-effectiveness of FITNET-NHS (Fatigue In Teenagers on the interNET in the NHS) compared to activity management to treat paediatric chronic fatigue syndrome (CFS)/myalgic encephalomyelitis (ME):amendment to the published protocol

The FITNET-NHS Trial is a UK, national, trial investigating whether an online cognitive behavioural therapy program (FITNET-NHS) for treating chronic fatigue syndrome/ME in adolescents is clinically effective and cost-effective in the NHS. At the time of writing (September 2019), the trial was recruiting participants. This article presents an update to the planned sample size and data collection duration previously published within the trial protocol. Trial registration: ISRCTN, ID: 18020851. Registered 8 April 2016