Social Preferences,Information Structure and Contract Selection
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| Title | Social Preferences,Information Structure and Contract Selection
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| Author | Zhou Yean and Song Zifeng |
| Organization | Renmin University of China; Development Research Center of State Council |
| Email | rendayean@163.com,szifeng-pk@163.com |
| Key Words | Contract Theory; Principal-Agent; Gift Exchange; Experimental Economics |
| Abstract | This paper reports an experiment with one principal and multiple agents, the features of which are that the principal has the right to make contract information observable or unobservable to all agents and these agents have unequal productivity. By analyzing selection, implementation and result of the contracts, this paper finds that the principal tends to make contracts unobservable or provide more similar contracts. Also, this paper finds that gift exchange effect between the principal and the agent is very prominent, although the level is affected by vertical unfairness, information structure and competition. The main reason leading to these results is that some individuals have social preferences such as fair consideration. This conclusion can help us understand contracts in the economic society. |
| Serial Number | WP64 |
| Time | 2011-03-22 |
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