1 Økonomisk Institut, Department of Economics, Faculty of Social Sciences, Københavns Universitet2 University of Innsbruck3 Økonomisk Institut, Department of Economics, Faculty of Social Sciences, Københavns Universitet4 University of Innsbruck
We conduct a laboratory experiment with agents working on, and principals benefiting from, a real effort task in which the agents' performance can only be evaluated subjectively. Principals give subjective performance feedback to agents, and agents have an opportunity to sanction principals. In contrast to existing models of reciprocity, we find that agents tend to sanction whenever the feedback of principals is below their subjective self-evaluations even if agents' pay-offs are independent of it. In turn, principals provide more positive feedback (relative to their actual performance assessment of the agent) if this does not affect their pay-off.
Scandinavian Journal of Economics, 2014, Vol 116, Issue 2, p. 570-590
Faculty of Social Sciences; contracts; reciprocity; subjective performance evaluations