Principal–agent models in which the agent has access to private information before a
contract is signed are a cornerstone of contract theory. We have conducted an experiment
with 720 participants to explore whether the theoretical insights are reflected by the
behaviour of subjects in the laboratory and to what extent deviations from standard theory
can be explained by social preferences. Investigating settings with both exogenous and
endogenous information structures, we find that agency theory is indeed useful to …

Principal-agent models in which the agent has access to private information before a
contract is signed are a cornerstone of contract theory. We have conducted an experiment
with 720 participants to explore whether the theoretical insights are reflected by the behavior
of subjects in the laboratory and to what extent deviations from standard theory can be
explained by social preferences. Investigating settings with both exogenous and
endogenous information structures, we find that agency theory is indeed useful to …