Explicit versus Implicit Contracts for Dividing the Benefits of Luiss显式和划分路易斯的好处隐性契约

1、explicit versus implicit contracts for dividing the benefits of cooperationmarco casari and timothy casonpurdue universitya partnership game as in most experimental labor markets, in this game two individuals interact and must cooperate to generate a divisible joint surplus the standard environment

2、(e.g., fehr & co-authors) is sequential, with payments sometimes before and sometimes after effort by contrast, in our game efforts are simul-taneous, and must be incurred by both parties as in earlier research, however, the relationship is still hierarchical, with one “strong” agent responsible

3、 for dividing the surplus example: senior partners at a law firmparameters and treatments baseline: strong agent selects a & b after effort choices bonus: like baseline, except strong agent makes an unenforceable “promise” of a & b pre-effort (implicit contract) explicit commitment: strong a

4、gent announces a committed level of a & b pre-effort (explicit contract) 144 subjects (48 per treatment)strong agent1 (high effort)2 (low effort)weak agent1 (high effort)a, b(a+b=60)10, 02 (low effort)0, 1010, 10design & predictions summary 3 preliminary measurements without feedback lottery

5、 choices, ultimatum & trust games (strategy meth) 10 rounds of partnership game, with 1 round paid perfect strangers re-matching baseline and bonus: low effort equilibrium, but high effort can occur in equilibrium for some distributions of social pref. types explicit commitment: multiple equilib

6、ria, including high effort equilibrium (commitment can turn effort choice into a stag hunt)results: pooled effort choices summarypanel a: baselineweak agentstrong agenthigh effortlow efforttotalshigh effort17.9%36.7%54.6%low effort14.6%30.8%45.4%totals32.5%67.5%100.0%n=480panel b: bonusweak agentstr

7、ong agenthigh effortlow efforttotalshigh effort35.8%36.7%72.5%low effort10.4%17.1%27.5%totals46.3%53.8%100.0%n=480panel c: explicit commitmentweak agentstrong agenthigh effortlow efforttotalshigh effort59.6%28.3%87.9%low effort5.0%7.1%12.1%totals64.6%35.4%100.0%n=480time series of mutual cooperation

8、earnings, average bonuses, and efficiencyoverall frequency of high effort choicesfrequency of mutual high effort outcomeactual bonus paid by strong agents choosing high effortave. earnings strong agentave. earnings weak agentshare of earnings of strong agentefficiency (possible range from 16.7% to 1

9、00%)baselineall periods43.5%17.9%10.813.68.461.8%36.7%last 3 periods25.0%5.6%9.49.051.1%30.7%bonusall periods59.4%35.8%11.919.89.966.7%49.5%last 3 periods47.9%25.0%15.89.762.0%42.5%explicit commitmentall periods76.3%59.6%21.421.818.753.8%67.5%last 3 periods81.3%68.1%24.520.154.9%74.3%promised and ac

10、tual bonusimplicit and explicit bonus offers to coordinate effortsbonus treatmentexplicit commitmentmeasurements of risk aversion and social preferences a majority (70%) of our subjects appear risk averse on the lottery choices most of the others appear risk neutral average ultimatum offer was 28.2

11、francs (out of 60), average 27.0 francs demanded 63% of trustors trusted, but 60% of trustees kept all 60 francs and only 26% provided a positive return to the trustor “fair-minded” strong agents who offered at least 30 francs in the ultimatum game were more trustworthy on average but “fair-minded”

12、weak agents who demand at least 25 of 60 francs were not less likely to trustmeasured preferences help partnership behavior (stable types across games) strong agents who are more risk averse tend to exert lower effort in the bonus treatment, risk-seeking strong agents offer higher bonuses but pay lo

13、wer actual bonuses trusting weak agents were more likely to exert high effort in the baseline and bonus treatments untrustworthy strong agents were less likely to exert high effort in the baseline treatment but more likely to exert high effort in the explicit commitment treatmentthe last slide while

14、 our results are consistent with some agents having social preferences, explicit contractswhich do not rely on social preferences to achieve efficiencyclearly perform better than implicit contracts in this partnership setting similar behavior is exhibited by other primates non-kin capuchin monkeys c

15、hoose low effort when dominant member of pair cant commit to sharing perhaps implicit contracts in this environment require repeated interaction? would implicit contracting work better if explicit contracting required costly verification and strong agents had a choice between implicit and explicit c

16、ontracting?implicit contracts and social preferences recent research has documented superior performance of implicit (“bonus”) contracts in some laboratory labor markets fehr, klein & schmidt (2007) show that principals prefer to offer an unenforceable bonus over an explicit incentive contract t

17、hat relies on costly verification of agent effort an efficiency wage “trust” contract does worse, however than an explicit contract social preferences, such as simple inequity aversion, are consistent with these results how general is this “failure” of contract theory?equilibrium predictions (self-r

18、egarding and inequity-averse preferences) baseline and bonus treatments: unique equilibrium of low effort for standard, self-interested preferences for certain type distributions of social preferences (e.g., inequity aversion), high effort outcome can occur in equilibrium promised bonus could provide a type signal explicit commitment treatment: multiple equilibria exist, including both high and low effort equilibria, for self-interested and