There is increasing empirical and experimental evidence thatproviding financial incentives to agents to performcertain socially desirable actions may permanently reduce other typesof motivations to undertake these actions.We study the impact of financial incentives on the desire for...

This note examines the potential output gains from the implementation of optimal teacher incentive pay schemes, by calibrating the Hölmstrom and Milgrom (1987) hidden action model using data from Muralidharan and Sundararaman (2011), a teacher incentive pay experiment implemented in Andhra...

Using field and laboratory experiments, we demonstrate that the complexity of incentive schemes and worker bounded rationality can affect effort provision, by shrouding attributes of the incentives. In our setting, complexity leads workers to over-provide effort relative to a fully rational...

We analyze the costs and benefits of using social image to foster virtuous behavior. A Principal seeks to motivate reputation-conscious agents to supply a public good. Each agent chooses how much to contribute based on his own mix of public-spiritedness, private signal about the value of the...

This paper deals with the interplay between economic incentives and social norms in firms. We outline a simple model of team production and provide preliminary results on linear incentive schemes in the presence of a social norm that may cause multiple equilibria. The effect of the social norm...

This paper reviews three distinct strategies in recent economics for using the concept of social identity in the explanation of individual behavior: Akerlof and Kranton’s neoclassical approach, Sen’s commitment approach, and Kirman et al.’s complexity approach. The primary focus is the...

Incentive schemes affect performance and priorities of agents but, in reality, they can be complicated even for simple tasks. We analyze the effects of the salience of incentives in a team production setting where the principal has an interest in quantity and quality of output. We use data from...

In corporate practice, incentive schemes are often complicated even for simple tasks. Hence, the way they are communicated might matter. In a controlled field experiment, we study a minimally invasive change in the communication of a well-established incentive scheme - a reminder regarding the...