Methods
Tuesday, January 1, 2002

Mathias Erlei

Clausthal U. of Technology

Mathias Erlei

Experimental Economics References

Abstract

Two streams of actual research in experimental economics shall be discussed. The first one is about Investment behavior in a hold up context: it shall be shown that investment behavior deviates from the standard theoretical predictions and that the choice of the particular bargaining game is very important. The second one will develop endogenous choice of incomplete contracts: it shall be shown that incomplete contracts often outperform complete incentive contracts. Economic agents understand this and, consequently, consciously choose incomplete contracts.