- A-Z
- Jena Economic Resea...
- Volume 6
- Mediocrity and Indu...
- Abgebildete Person
- Erschienen
- 12. September 2012
- Nummer des Discussion-Papers
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2012-053
- Schlagwort(e)
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communication
incentives
mediocrity
reciprocity
- Zusammenfsg.
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We report evidence from an experiment where a principal chooses an agent out of two to perform a task for a fixed compensation. The principal’s payoff depends on the agent’s ex-ante ability and on a non-contractible effort that the agent has to exert once employed. We find that a significant share of principals select the mediocre agent (i.e. the one with the lower ex-ante ability). When the principal is allowed to send a message, mediocre agents exert more effort than agents with the higher ability, and principals who chooses mediocre agents on average have a larger payoff than principals who select agents with higher ability. This difference in effort overcompensates the difference in ability. Mediocre agents reciprocate more than agents who have ex-ante higher ability when the principals are able to make them feeling indebted.
- article pub. typess JER
- Research article
- article languages JER
- Englisch
- article research fields JER
- economics
- JEL-Classification for JER
- C9 - Design of Experiments