talented workers leads to an escalating reliance on performance pay and other high-powered incentives, thereby shifting effort … distorts incentives downward in order to extract rents. More generally, as declining market frictions lead employers to compete …, while inequality tends to rise monotonically. Bonus caps and income taxes can help restore balance in agents' incentives and …

of the typical American firm. Variable pay is usually touted as a way to provide incentives to managers whose interests …

. High-powered incentives may crowd out motivation as pessimism about the norm is conveyed. But by choosing fixed wages or …

experiment that analyzes the influence of other-regarding preferences on sorting and incentives. Experimental evidence shows that … the provision of incentives and their sorting effect. …

This paper studies the interplay between economic incentives and social norms in firms. We introduce a general … also show how social norms can induce multiplicity of equilibria and how steeper economic incentives can reduce effort. …

During the last two decades economists have made much progress in understanding incentives, contracts and organisations … effects of incentives. Economists may fail to understand the levels and the changes in behaviour if they neglect motives like … the desire to reciprocate or the desire to avoid social disapproval. We show that monetary incentives may backfire and …