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={Steffen Huck and Andrew J. Seltzer and Brian Wallace}, journal={The American Economic Review}, year={2011}, volume={101}, pages={819-843} }
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…
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