Академический Документы
Профессиональный Документы
Культура Документы
Name:
Oana Bobic
Student number:
10599290
Title:
HYPOTHESES
The following hypotheses will be tested:
Hypothesis 1: Effort levels will be higher in the first part.
Hypothesis 2: Principals will control less in the second part.
Hypothesis 3: When being controlled by the principals, agents in the control group (only first part) will
have lower effort choices than agents in the treatment group (both parts).
Hypothesis 4: Agents with effort levels above average in the first part will receive higher wages in the
second part.
DATA COLLECTION
The experiment will take place in Romania, most probably with paper and pen in lecture rooms of a
(chemistry) university. One person will participate in only one of the treatments, only once, in order to
avoid learning effects.
RELATED LITERATURE
This particular matter has not been previously studied. Wernerfelt (1988) has a theoretical study on
strategic monitorings impact on reputation building, one of the conclusions of relevance for the
research question being that If agents are risk-neutral, the principal always monitors more early in the
game, while an agent may or may not work harder early in the game. This proposition led to
formulating the first two hypotheses. The aspect that Wernerfelt (1988) ignores is the effect of being
monitored on the agent the monitoring decision is viewed only from the principals perspective.
(Servtka 2009) performs an experiment on reputation, social influence and identification effects in
dictator games. He induces reputation in a similar way to the one included in this research proposal and
finds it has the greatest effect of the three studied concepts.
LIMITATIONS
In order to avoid an extra session, I will assume that the agents decision wouldnt be significantly
different if it came as an actual reaction to the principals choice, as proven by Falk & Kosfeld (2006)
with the SR10 treatment. They also have an EX10 treatment through which they control whether
imposing a minimum amount of effort is still as big as a problem when coming as an outside decision
we will also assume their results valid in this case (agents mostly react negatively to the principals
decision to control, not to having a minimum level of effort imposed).
Next to these two assumptions that will not be checked for, there is also the general laboratory
experiment limitation: along with higher internal validity comes lower external validity.
REFERENCES
Falk, A. & Kosfeld, M., 2006. The Hidden Costs of Control. American Economic Review, 96(5),
pp.16111630.
Servtka, M., 2009. Separating reputation, social influence, and identification effects in a dictator game.
European Economic Review, 53(2), pp.197209.
Wernerfelt, B., 1988. Reputation, monitoring, and effort. Information Economics and Policy, 3(3),
pp.207218.