How can penalty incentive contract be chosen? : the impact of perceived fairness

In this study, I investigated the preference for economically equivalent compensation contracts, i.e., bonus and penalty contracts. The study investigated the factors that influence the choice of penalty contracts. The results showed that bonus contracts were preferred over penalty contracts. This result may be because bonus contracts are perceived as fairer. In addition, if the fairness of the penalty contract is higher, the penalty contract is more likely to be chosen. This may be because the perception of fairness toward penalty contracts was partially improved by showing and comparing bonus and penalty contracts at the same time, which led to the choice of penalty contracts.