In many workplaces co-workers have the best information about each other's effort. Managers may attempt to exploit this … truthful. Still, the principal will always include such a bonus in the optimal contract, and possibly complement it with a team …

of incentives and when incentives can have “hidden costs”, i.e., a detrimental effect. We show experimentally that in all …'s behavior. Our finding contributes to the micro-foundation of psychological effects of incentives …

We conduct a field experiment in a Dutch retail chain of 122 stores to study the interaction between team incentives …, team social cohesion, and team performance. Theory predicts that the effect of team incentives on team performance … increases with the team's social cohesion, because social cohesion reduces free-riding behavior. In addition, team incentives …