Replication data for: Contracts as Reference Points—Experimental Evidence

Principal Investigator(s): View help for Principal Investigator(s) Ernst Fehr; Oliver Hart; Christian Zehnder

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20081227_data			10/11/2019 03:41:PM
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Project Citation:

Fehr, Ernst, Hart, Oliver, and Zehnder, Christian. Replication data for: Contracts as Reference Points—Experimental Evidence. Nashville, TN: American Economic Association [publisher], 2011. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-11. https://doi.org/10.3886/E112406V1

Project Description

Summary: Hart and John Moore (2008) introduce new behavioral assumptions that can explain long-term contracts and the employment relation. We examine experimentally their idea that contracts serve as reference points. The evidence confirms the prediction that there is a trade-off between rigidity and flexibility. Flexible contracts—which would dominate rigid contracts under standard assumptions—cause significant shading in ex post performance, while under rigid contracts much less shading occurs. The experiment appears to reveal a new behavioral force: ex ante competition legitimizes the terms of a contract, and aggrievement and shading occur mainly about outcomes within the contract. (JEL D44, D86, J41)

Scope of Project

JEL Classification:
      D44 Auctions
      D86 Economics of Contract: Theory
      J41 Labor Contracts

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Published Versions

V1 [2019-10-11]

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