Free-riding and Fairness in Principal-Multi-Agent Relationships: Experimental Evidence
Year: 2001
Type: preprint
Abstract: How do intrinsic motivations such as fairness and reciprocity influence the efficiency of a principal - multi-agent relationship when joint production in a team is considered? Focusing on moral hazard in teams (Holmström, 1982), this paper reports the results of an experiment designed to determine whether principal's fairness helps in reducing free-riding amongst team members. Two treatments were run, with reshuffling (stranger treatment) and without reshuffling (partner treatment). Experimental evidence shows that i)offers of fair contracts favor team cooperation in the stranger treatment, whereas ii) repeated interactions do not necessarily improve team cooperation. All results of the partner treatment point to the difficulty of establishing a fruitful cooperation between principals and team members unequally motivated by fairness considerations
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1534581569