Team production is a frequent feature of modern organizations. Combined with team incentives, team production can create externalities among workers, since their utility upon accepting a contract depends on their team’s performance and therefore on their colleagues’ productivity. We study...

Empirical research suggests that - rather than improving incentives - exerting controlcan reduce workers' performance by eroding motivation. The present paper shows thatintention-based reciprocity can cause such motivational crowding-out if individuals differin their propensity for reciprocity...

This theoretical paper explores the impact of gender diversity on team production. The key assumption is that men derive utility from signaling high ability to female colleagues. The analysis shows that some gender diversity maximizes expected team production if (i) men and women have similar...

In a laboratory experiment, we measure subjects’ willingness to pay for a transparently useless decision right concerning the choice between two real effort tasks. We also elicit for each participant her change in beliefs about the likelihood of receiving her preferred task if she rather than...

Team production is a frequent feature of modern organizations. Combined with team incentives, team production can create externalities among workers, since their utility upon accepting a contract depends on their team’s performance and therefore on their colleagues’ productivity. We study...

Self-signaling theory argues that individuals partly behave prosocially to create or uphold a favorable self-image. To study self-signaling theory, we investigate whether increasing self-image concerns affects charitable giving. In our experiment subjects divide 20 euros between themselves and a...

Teamwork and cooperation between workers can be of substantial value to a firm, yet the level of worker cooperation often varies between individual firms. We show that these differences can be the result of labor market competition if workers have heterogeneous preferences and preferences are...

Partnerships are the prevalent organizational form in many industries. Most partnerships share profits equally among the partners. Following Kandel and Lazear (1992) it is often argued that "peer pressure" mitigates the arising free-rider problem. This line of reasoning takes the equal sharing...

This paper considers a firm whose potential employees have private information on both their productivity and the extent of their fairness concerns. Fairness is modelled as inequity aversion, where fair-minded workers suffer if their colleagues get more income net of production costs. Screening...

While most market transactions are subject to strong incentives, transactions within Firms are often not incentivized. We offer an explanation for this observation based on envy among agents in an otherwise standard moral hazard model with multiple agents. Envious agents suffer if other agents...