Contract theory predicts that workers are remunerated based on all available unbiased individual performance measures. In the real world, measures are often biased: tasks are too complex to include all measures, unforeseen contingencies occur for which contracts specify nothing, and the...

What happens if A wants to buy a good or service from B, but not all relevant characteristics can be fixed in a contract? This book gives a non-technical overview of various models dealing with this situation. Particular emphasis is put on the problem that the service includes various tasks and...

Contract theory predicts that workers are remunerated based on all available unbiased individual performance measures. In the real world, measures are often biased: tasks are too complex to include all measures, unforeseen contingencies occur for which contracts specify nothing, and the...

What happens if A wants to buy a good or service from B, but not all relevant characteristics can be fixed in a contract? This book gives a non-technical overview of various models dealing with this situation. Particular emphasis is put on the problem that the service includes various tasks and...

In a field experiment with a retail chain (1,300 employees, 193 shops), randomly selected sales teams received a bonus. The bonus increases both sales and number of customers dealt with by 3%. Each dollar spent on the bonus generates $3.80 in sales, and $2.10 in profit. Wages increase by 2.2%...

We test the effectiveness of team incentives by running a natural field experiment in a retail chain of 193 shops and 1,300 employees. As a response to intensified product market competition, the firm offered a bonus to shop teams for surpassing sales targets. A bonus to teams rather than...