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Transparency, inequity aversion, and the dynamics of peer pressure in teams : theory and evidence

Mohnen, Alwine (contributor); Pokorny, Kathrin (contributor) - 2008

We provide an explanation for peer pressure in teams based on inequity aversion. Analyzing a two-period model with two agents, we find that the effect of inequity aversion strongly depends on the information structure. When contributions are unobservable, agents act as if they were purely...

Persistent link: https://www.econbiz.de/10003652683

Team governance : empowerment or hierarchical control

Friebel, Guido (contributor); … - 2007

We investigate a team setting in which workers have different degrees of commitment to the outcome of their work. We show that if there are complementarities in production and if the team manager has some information about team members, interventions that the manager undertakes in order to...

Persistent link: https://www.econbiz.de/10003578893

You don't always get what you pay for

Schnedler, Wendelin (contributor) - 2007

Consider a principal-agent relationship in which more effort by the agent raises the likelihood of success. Does rewarding success, i.e., paying a bonus, increase effort in this case? I find that bonuses have not only an incentive but also an income effect. Overall, bonuses paid for success may...

Persistent link: https://www.econbiz.de/10003561637

Promotions and incentives : the case of multi-stage elimination tournaments

Altmann, Steffen (contributor); Falk, Armin (contributor); … - 2008

of our laboratory experiment is a two-stage tournament in which equilibrium efforts are the same in both stages. We … compare this treatment to a strategically equivalent one-stage tournament and to another two-stage tournament with a more … predictions and compared to the equivalent one-stage tournament. The results for the more convex two-stage tournament show that …

Persistent link: https://www.econbiz.de/10003777950

Layoffs as part of an optimal incentive mix : theory and evidence

Frederiksen, Anders (contributor); … - 2006

Firms offer highly complex contracts to their employees. These contracts contain a mix of incentives, such as fixed wages, bonus payments, promotion options, and layoff threats. In general, economists understand how incentives motivate employees but not why a particular mix should be used. In...

Persistent link: https://www.econbiz.de/10003499735

Job assignments under moral hazard : the Peter Principle revisited

Koch, Alexander K. (contributor); … - 2007

The Peter Principle captures two stylized facts about hierarchies: first, promotions often place employees into jobs for which they are less well suited than for that previously held. Second, demotions are extremely rare. Why do organizations not correct 'wrong' promotion decision? This paper...

Persistent link: https://www.econbiz.de/10003635211

The persistent effect of competition on prosociality

Kosse, Fabian; Rajan, Ranjita; Tincani, Michela M. - 2023

We present the first causal evidence on the persistent impact of enduring competition on prosociality. Inspired by the literature on tournaments within firms, which shows that competitive compensation schemes reduce cooperation in the short-run, we explore if enduring exposure to a competitive...

Persistent link: https://www.econbiz.de/10014428113

Non-linear Incentives, worker productivity, and firm profits: evidence from a quasi-experiment

Freeman, Richard B.; Huang, Wei; Li, Teng - 2021

Using administrative data from a major Chinese insurance firm that raised its sales targets and rewards for insurance agents in a highly non-linear incentive system, we find that the improvement in productivity far outweighed the costs associated with bunching distortions and other gaming...

Persistent link: https://www.econbiz.de/10012433451

Turning relative deprivation into a performance incentive device

Stark, Oded; Kosiorowski, Grzegorz - 2021

The inclination of individuals to improve their performance when it lags behind that of others with whom they naturally compare themselves can be harnessed to optimize the individuals' effort in work and study. In a given set of individuals, we characterize each individual by his relative...

Persistent link: https://www.econbiz.de/10012419100

Incentives, self-selection, and coordination of motivated agents for the production of social goods

Bauer, Kevin; Kosfeld, Michael; Siemens, Ferdinand von - 2021

We study, theoretically and empirically, the effects of incentives on the self-selection and coordination of motivated agents to produce a social good. Agents join teams where they allocate effort to either generate individual monetary rewards (selfish effort) or contribute to the production of...

Persistent link: https://www.econbiz.de/10012596233