This study investigates experimentally how mutual monitoring affects effort when employees are compensated via rank-order tournaments. Theory and anecdotal evidence suggest that mutual monitoring may either decrease effort by facilitating collusion or increase effort by stimulating competition....

We investigate how supervisor pay transparency interacts with vertical pay dispersion to affect subordinates' reporting honesty in a budgeting setting. As predicted, results from our experiment suggest that the effect of supervisor pay transparency relative to secrecy on reporting honesty...