Deferred Compensation in Multiperiod Labor Contracts: An Experimental Test of Lazear's Model

S. Huck; A. Seltzer; Brian Wallace

DOI:10.1257/AER.101.2.819

Corpus ID: 16415006

Deferred Compensation in Multiperiod Labor Contracts: An Experimental Test of Lazear's Model

@article{Huck2011DeferredCI,
  title={Deferred Compensation in Multiperiod Labor Contracts: An Experimental Test of Lazear's Model},
  author={S. Huck and A. Seltzer and Brian Wallace},
  journal={The American Economic Review},
  year={2011},
  volume={101},
  pages={819-843}
}

S. Huck, A. Seltzer, Brian Wallace

Published 2011

Economics

The American Economic Review

This paper provides the first experimental test of Edward Lazear's (1979) model of deferred compensation. We examine the relationship between firms' wage offers and workers' effort supply in a multi-period environment. If firms can ex ante commit to a wage schedule with deferred compensation, workers should respond by supplying sufficient effort to avoid dismissal. We contrast this full-commitment case to controls with no commitment and computer-generated wages in order to examine the roles of… CONTINUE READING

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