Pure incentive schemes rely on the agent's self-interest, rather than more coercive control, to motivate subordinates. Yet most organizations, and in particular public agencies, rely very little on pure incentive contracts and instead use coercive mechanisms of monitoring and sanctioning that...

Pure incentive schemes rely on agent self-interest, rather than more coercive control, to motivate subordinates. Yet most organizations, and in particular public agencies, rely very little on pure incentive contracts. Most organizations rely on the primarily coercive mechanisms of monitoring and...

This essay discusses an integrative economic theory that reconciles rank-order tournaments with the traditional public administration concern for accountability in government. Recent reforms have concentrated on organizational designs that flow from piece-rate approaches to employee compensation...

We examine data from a laboratory test in which pairs of subjects are given the task of negotiating a wage-labor agreement. We find limited evidence for gender differences in the content of wage agreements and differences in trusting behavior

We examine how a principal implements a joint forcing contract for a team of two agents, whose joint product determines the value of the principal's asset. We focus on the "agents' problem": whether to contribute to a public good when one's costly contribution is unobservable. Our experiments...

Like the first-mover in an ultimatum game, the principal is a first-mover with foreknowledge of the agent’s “rational” best response function. The solution to the “principal’s problem” is to choose a contract that maximizes the principal’s expected profit given the agent’s...

This essay examines the roles of competition, comparison, imitation, and punishment in the design of bureaucratic performance. Through a series of simulations, this essay examines how these elements - alone and in combination - drive both the performance and technology search paths of adaptive...

The canonical principal-agent problem involves a risk-neutral principal who must use incentives to motivate a risk-averse agent to take a costly, unobservable action that improves the principal's payoff. The standard solution requires an inefficient shifting of risk to the agent. This paper,...