Firms irms operate in complex environments: a list of the categories in which they need to make interrelated choices would include employee pay, pricing, product attributes, production technologies, and management. In turn, these decisions involve responding to characteristics that are often hard to measure or uncertain, such as those related to market characteristics, the productivity of individual inputs, and entrepreneurial ability. Due to the complexity of the environment, research that seeks to understand the behavior of firms based on observational data faces many challenges at uncovering causal relationships. In this paper, we illustrate how field experiments, guided by economic theory, can address these challenges and provide new answers to long-standing questions about firms: Do firm choices maximize profits subject to constraints? If so, which constraints bind and inform decision making in firms? If not, why are firms operating inside the frontier? In this paper, we review field experiments that provide preliminary answers to these questions and map directions for further research. We organize our discus-sion into two classes of work. The first is field experiments conducted within firms, in which the units of observation are workers or divisions of a firm. The theory behind many of these experiments views the firm as an organization, emphasizing agency problems. We discuss field experiments that shed light on solutions to the agency problem, from incentive pay to social pressure and nonmonetary rewards.

Organizations often use awards to incentivize performance. We design a field experiment to unbundle the mechanisms through which awards may affect behavior: by facilitating social comparison and by conferring recognition and visibility. In a nationwide health worker training program in Zambia, employer recognition and social visibility increase performance while social comparison reduces it, especially for low-ability trainees. These effects appear when treatments are announced and persist through training. The findings are consistent with a model of optimal expectations in which low-ability individuals exert low effort in order to avoid information about their relative ability.

We present evidence from a natural field experiment involving nearly 100,000 individuals on the effects of offering economic incentives for blood donations. Subjects who were offered economic rewards to donate blood were more likely to donate, and more so the higher the value of the rewards. They were also more likely to attract others to donate, spatially alter the location of their donations towards the drives offering rewards, and modify their temporal donation schedule leading to a short-term reduction in donations immediately after the reward offer was removed. Although offering economic incentives, combining all of these effects, positively and significantly increased donations, ignoring individuals who took additional actions beyond donating to get others to donate would have led to an under-estimate of the total effect, whereas ignoring the spatial effect would have led to an over-estimate of the total effect. We also find that individuals who received a reward by surprise were less likely to donate after the intervention than subjects who received no reward, suggesting that for some individuals a surprise reward adversely affected their intrinsic motivations. We discuss the implications of these findings for understanding pro-social behavior.

the Chief Secretary and Chief Minister's offices for their support over the many years of this project. Financial support for the evaluation came from 3ie, the IGC, and the NSF (under grant SES-1124134), and financial support for the incentive payments described here came from the Government of the Punjab, Pakistan. This RCT was registered in the American Economic Association Registry for randomized control trials under Trial number AEARCTR-0000252. The views expressed here are those of the authors and do not necessarily reflect those of the many individuals or organizations acknowledged here, nor those of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

An Equilibrium Model of the African HIV/AIDS Epidemic Eleven percent of the Malawian population is HIV infected. Eighteen percent of sexual encounters are casual. A condom is used one quarter of the time. A choice-theoretic general equilibrium search model is constructed to analyze the Malawian epidemic. In the developed framework, people select between different sexual practices while knowing the inherent risk. The analysis suggests that the efficacy of public policy depends upon the induced behavioral changes and general equilibrium effects that are typically absent in epidemiological studies and small-scale field experiments. For some interventions (some forms of promoting condoms or marriage), the quantitative exercise suggests that these effects may increase HIV prevalence, while for others (such as male circumcision or increased incomes) they strengthen the effectiveness of the intervention. The underlying channels giving rise to these effects are discussed in detail.

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We are extremely thankful to the CEO, Board members, and staff of the Northern Ohio Blood Service

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We thank Dr. Hugo Medici, Susana Sirena and the staff of the Centro de Medicina Transfusional y

We are extremely grateful to Stefano Dellavigna and Emir Kamenica for extensive comments and suggestions. We are also grateful for comments from Michelle Andrews, Ron Borkovsky, Bart Bronnenberg,