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The Perks of Being in the Smaller Team : Incentives in Overlapping Contests

March, Christoph - 2020

We investigate overlapping contests in multi-divisional organizations in which an individual's effort simultaneously determines the outcome of several contests on different hierarchical levels. We show that individuals in smaller units are advantaged in the grand (organization-wide) contest for...

Persistent link: https://www.econbiz.de/10012845683

The Rise of Individual Performance Pay

Kvaløy, Ola - 2007

can hold-up, the lower is the implementable degree of peer dependent incentives. In a setting with team effects … complementary tasks and peer pressure, respectively we show that while team-based incentives are optimal if agents are dispensable …, it may be costly, and in fact suboptimal, to provide team incentives once the agents become indispensable …

Persistent link: https://www.econbiz.de/10012778199

Efficient Incentives with Social Preferences

Daske, Thomas; March, Christoph - 2022

This study explores mechanism design with allocation-based social preferences. Agents’ social preferences and private payoffs are all subject to asymmetric information. We assume quasi-linear utility and independent types. We show how the asymmetry of information about agents’ social...

Persistent link: https://www.econbiz.de/10014082238

The rise of individual performance pay

Kvaloy, Ola; Olsen, Trond - 2007

can hold-up, the lower is the implementable degree of peer dependent incentives. In a setting with team effects … - complementary tasks and peer pressure, respectively - we show that while team-based incentives are optimal if agents are dispensable …, it may be costly, and in fact suboptimal, to provide team incentives once the agents become indispensable. …

Persistent link: https://www.econbiz.de/10010264248

Self-Confidence and Reactions to Subjective Performance Evaluations

Bellemare, Charles - 2019

Subjective performance evaluations are commonly used to provide feedback and incentives to workers. However, such evaluations can generate significant disagreements and conflicts, the severity of which may be driven by many factors. In this paper we show that a workers’ level of...

Persistent link: https://www.econbiz.de/10012892258

Trust and Contracts : Empirical Evidence

D'Acunto, Francesco; Xie, Jin; Yao, Jiaquan - 2021

Trust between parties should drive the negotiation and design of contract: if parties did not trust each others' reaction to unplanned events, they might agree to pay higher costs of negotiation to complete contracts. Using a unique sample of U.S. principal-agent consulting contracts and a...

Persistent link: https://www.econbiz.de/10013314897

Motivation and Incentives in an Online Labor Market

Fest, Sebastian - 2019

In this paper we present results from a large scale real effort experiment in an online labor market investigating the effect of performance pay and two common leadership techniques: Positive expectations and specific goals. We find that positive expectations have a significant negative effect...

Persistent link: https://www.econbiz.de/10012891569

Strict Incentives and Strategic Uncertainty

Carlsson, Hans - 2019

This paper proposes a comprehensive perspective on the question of self-enforcing solutions for normal form games. While this question has been widely discussed in the literature, the focus is usually either on strict incentives for players to stay within the proposed solution or on strategic...

Persistent link: https://www.econbiz.de/10012866617

Contractual and organizational structure with reciprocal agents

Englmaier, Florian; Leider, Stephen - 2008

Empirically, compensation systems generate substantial effort despite weak monetary incentives. We consider reciprocal motivations as a source of incentives. We solve for the optimal contract in the basic principal-agent problem and show that reciprocal motivations and explicit performance-based...

Persistent link: https://www.econbiz.de/10010264451

Do managers with limited liability take more risky decisions? An information acquisition model

Malcomson, James M. - 2010

Risk-neutral individuals take more risky decisions when they have limited liability. Risk-neutral managers may not when acting as agents under contract and taking costly actions to acquire information before taking decisions. Limited liability makes it optimal to increase the reward for outcomes...

Persistent link: https://www.econbiz.de/10010275809