This study investigates whether agents’ resentment of controls in a gift-exchange game can be effectively mitigated using the strategy method where agents’ effort choices are elicited contingent on all possible contract choices by principals. The results suggest that allowing agents to contemplate contract choices prospectively results in less resentment and that agents exert higher effort than without this “cooling” process.
Davis, J.L. (2018) Cooler Heads Prevail: An Experimental Study on the “Cooling” Effect of the Strategy Method on Agent Resentment. Theoretical Economics Letters, 8, 854-860. https://doi.org/10.4236/tel.2018.85060
The authors and Scientific Research Publishing Inc.
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