We study an important mechanism underlying employee referrals into informal low skilled jobs in developing countries. Employers can exploit social preferences between employee referees and potential workers to improve discipline. The profitability of using referrals increases with referee stakes...

Macroeconomic fluctuations affect corporations’ performance through demand and cost conditions. Incentive effects of performance-based compensation schemes for management may be weakened or biased by macroeconomic influences if management is unable to forecast macroeconomic fluctuations or...

This paper investigates dynamic peer effects in a sales company where workers operate in teams and receive a bonus that depends on both individual worker and team sales. We examine how the past productivity of co-workers affects the current individual performance of team members. To address this...

The paper studies the interaction between two kinds of incentives: career concerns and intrinsic motivation emerging from agent’s alignment with organization’s objectives or another source of organizational involve- ment. The information on both skills and involvement can be asymmetric and...

The paper studies the impact of altruism on Agent’s motivation in the career concerns model. I show that career concerns incentive is lessened by altruism. As a consequence, altruism can decrease effort, though conventional wisdom suggests that effort should always be higher for the more...

We test whether a demand response by patients exists in the Norwegian primary care sector. In Norway, physicians are remunerated either by salary or by incentive contract, and we have access to a large data survey that allows us to study the relationship between consumer satisfaction with...

We have followed a pay for performance reform in the phone based customer service centre of an insurance company, from its introduction in 2001 until the end of 2004. We use hard and soft data from the design and impact of the reform to contrast two theories of work motivation; the traditional...

We introduce a network formation model based on the idea that individuals engage in production (or decide to participate in an action) depending on the similar actions of the people they observe in the society. We differentiate from the classical models of participation by letting individuals to...

In the vast majority of laboratory experiments documenting the existence of reciprocity subjects are endowed with windfall funds. In many environments with salient fairness considerations such endowments are known to inflate subjects’ other-regarding behavior, thereby creating a so-called...

This paper tests whether changes in 'incidental emotions' lead to changes in economic choices. Incidental emotions are experienced at the time of an economic decision but are not part of the payoff from a particular choice. As such, the standard economic model predicts that incidental emotions...