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Insurance and information : firms as a commitment device

Bovenberg, Ary Lans; Teulings, Coen N. - 2001

We explore the role of firms in insuring non-verifiable output. As a device that allows workers to commit to thedelivery of their output, the firm arises endogenously as an alternative to the market if workers are sufficiently riskaverse and the firm can base its incentive payments on good...

Persistent link: https://www.econbiz.de/10011316894

Knight fever : towards an economics of awards

Frey, Bruno S. - 2005

Awards in the form of orders, medals, decorations and titles are ubiquitous in monarchies and republics, private organizations, not-for-profit and profit-oriented firms. Nevertheless, economists have disregarded this kind of non-material extrinsic incentive. The demand for awards relies on an...

Persistent link: https://www.econbiz.de/10010261193

On the Hidden Costs of Incentive Schemes

Sliwka, Dirk - 2003

By enriching a principal-agent model it is shown that the introduction of monetary incentives may reduce an agent?s motivation. In a first step, we allow for the possibility that some agents stick to unverifiable agreements. The larger the fraction of reliable agents, the lower powered will then...

Persistent link: https://www.econbiz.de/10010261572

Incentives in Tournaments with Endogenous Prize Selection

Harbring, Christine; Irlenbusch, Bernd - 2004

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....

Persistent link: https://www.econbiz.de/10010262080

On the Hidden Costs of Incentive Schemes

Sliwka, Dirk - 2003

By enriching a principal-agent model it is shown that the introduction of monetary incentives may reduce an agent's motivation. In a first step, we allow for the possibility that some agents stick to unverifiable agreements. The larger the fraction of reliable agents, the lower powered will then...

Persistent link: https://www.econbiz.de/10010263084

The Boundary of the Firm in a Model of Trade Within a Hierarchy

Levy, Nadav - 2003

this is satisfied not only under the assumption of full commitment by the general office of the firm, but also … interestingly, if it has no commitment power at all. At the time of trade, the uninformed general office prefers to delegate the … emerges only if we assume that the general office retains some limited commitment power. The general office may then mandate …

Persistent link: https://www.econbiz.de/10010263343

The rise of individual performance pay

Kvaloy, Ola; Olsen, Trond - 2007

Why does individual performance pay seem to prevail in human capital intensive industries? We present a model that may explain this. In a repeated game model of relational contracting, we analyze the conditions for implementing peer dependent incentive regimes when agents possess indispensable...

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

Transparency, inequity aversion, and the dynamics of peer pressure in teams: theory and evidence

Mohnen, Alwine; Pokorny, Kathrin; Sliwka, Dirk - 2008

We provide an explanation for peer pressure in teams based on inequity aversion. Analyzing a two-period model with two agents, we find that the effect of inequity aversion strongly depends on the information structure. When contributions are unobservable, agents act as if they were purely...

Persistent link: https://www.econbiz.de/10010268881

Productivity in contests: Organizational culture and personality effects

Andersson, Ola; Huysentruyt, Marieke; Miettinen, Topi; … - 2010

We study the interaction of organizational culture and personal prosocial orientation in team work where teams compete against each other. In a computerized lab experiment with minimal group design, we prime subjects to two alternative organizational cultures emphasizing either self-enhancement...

Persistent link: https://www.econbiz.de/10010270029

Treating Equals Unequally - Incentives in Teams, Workers' Motivation and Production Technology

Goerg, Sebastian J.; Kube, Sebastian; Zultan, Ro'i - 2007

The importance of fair and equal treatment of workers is at the heart of the debate in organizational management. In this regard, we study how reward mechanisms and production technologies affect effort provision in teams. Our experimental results demonstrate that unequal rewards can potentially...

Persistent link: https://www.econbiz.de/10010274004