Bonus or flat wage? An experiment into the principal-agent problem
Abstract We conduct a simple principal–agent experiment in order to find the effects of information asymmetry on compensation. Our aim is the analysis of the appropriate compensation and its impact on employee’s effort. Furthermore we want to compare the offered compensation and the supplied effort in the version without communication and we want to know whether the experimental observations are consistent with the theoretical considerations. The experimenters found out that compensations observed during the experiment were different from those suggested by the theory and although they were theoretically not enough to induce high effort, we could observe high performance supplied by the agents.