Deception and Incentives How Dishonesty Undermines E ¤ ort Provision

  title={Deception and Incentives How Dishonesty Undermines E ¤ ort Provision},
  author={Florian Ederer},
In this paper we show that subtle forms of deceit undermine the e¤ectiveness of incentives. We design an experiment in which the principal has an interest in underreporting the true performance di¤erence between the agents in a dynamic tournament. According to the standard approach, rational agents should completely disregard the performance feedback of self-interested principals and choose their e¤ort level as if they had not been given any information. However, despite substantial… CONTINUE READING
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