In many environments, tournaments can elicit more effort from workers, except perhapswhen workers can sabotage each other. Because it is hard to separate effort, ability andoutput in many real workplace settings, the empirical evidence on the incentive effect oftournaments is thin...

Although relative performance schemes are pervasive in organizations reliable empirical dataon induced sabotage behavior is almost non-existent. We study sabotage in tournaments in acontrolled laboratory experiment and are able to confirm one of the key insights from theory:effort and sabotage...

How can a principal (an agent) ensure that an agent (a principal) will work (pay up), ifpayment (work) precedes work (payment)? When a banknote is torn in two, each part is byitself worthless. A principal can pre-commit to payment-on-delivery, by tearing a banknoteand giving the agent the first...

This paper examines the relationship between firms? wage offers and workers? supply of effort using a three-period experiment. In equilibrium, firms will offer deferred compensation: first period productivity is positive and wages are zero, while third period productivity is zero and wages are...

Tournament incentive schemes offer payments dependent on relative performance and thereby are intended to motivate agents to exert productive effort. Unfortunately, however, an agent may also be tempted to destroy the production of his competitors in order to improve the own relative position....

In a contest players compete for winning a prize by effort and thereby increasing their probability of winning. Contestants, however, could also improve their own relative position by harming the other players. We experimentally analyze contests with heterogeneous agents who may individually...

How can a principal (an agent) ensure that an agent (a principal) will work (pay up), if payment (work) precedes work (payment)? When a banknote is torn in two, each part is by itself worthless. A principal can pre-commit to payment-on-delivery, by tearing a banknote and giving the agent the...

This paper analyses the relationship between workers’ gender and monetary incentives in an experimental setting based on a double-tournament scheme. The participants must choose between a piece-rate payment or a performance prize. The results show that women fail to reveal their type, and are...

The notions of one's social identity and group membership have recently become topics for economic theory and experiments, and recent research has shown the importance of identity in a wide array of economic environments. But predictions are unclear when there is some trade-off between one's...

In this paper we experimentally study effects of exogenous revenue shocks on long-term relationships between firms and workers. While we find that shocks have no significant effect on wages and a little effect on the duration of relationships, we observe their significant effect on effort...