Coordination under loss contracts

• 成果类型: Article
• 署名作者: Ahrens, Steffen; Bitter, Lea; Bosch-Rosa, Ciril
• 署名单位: Free University of Berlin; European Central Bank; Technical University of Berlin
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2022.11.010
• 发表日期: 2023
• 页码: 270-293
• 关键词: Strategic uncertainty; loss aversion; COORDINATION; Contract design; framing; experiment

摘要

In this paper we study the effects that loss contracts-prepayments that can be clawed back later-have on group coordination when there is strategic uncertainty. To do so, we investigate the choices made by experimental subjects in a minimum effort game. In control sessions, incentives are formulated as a classic gain contract, while in treatment sessions, incentives are framed as an isomorphic loss contract. Contrary to most results in the loss contract literature, in our setup loss contracts backfire by reducing the minimum effort of groups and worsening the coordination between group members. Such results suggest that the success off loss contracts is context dependent and offer an explanation as to why loss contracts are not implemented more often in the wild.(c) 2022 Elsevier Inc. All rights reserved.