Several selection processes use multistage tournaments to choose the best candidates. The theoretical models predict that tournaments are efficient in selecting the best candidates, as they stimulate the best to perform relatively better than their opponents. Empirical tests are difficult, as...

This paper reports the results from a large-scale laboratory experiment investigating the impact of tournament incentives and wage gifts on creativity. We find that tournaments substantially increase creative output, with no evidence for crowding out of intrinsic motivation. By comparison, wage...

Despite the prevalence of non-routine analytical team tasks in modern economies, little is known about how incentives influence performance in these tasks. In a field experiment with more than 3000 participants, we document a positive effect of bonus incentives on the probability of completion...

This paper studies optimal task assignments in a setting where agents are expectation-based loss averse according to KoszegiRabin (2006) and KoszegiRabin (2007) and are compensated according to an aggregated performance measure in which tasks are technologically independent. We show that the...

Setting CEO compensation is a critical but difficult task. Thus, given the lack of transparency that frequently accompanies such decisions, it is important to know whether it is subject to bias. We document the presence of illusory correlation in CEO compensation. By this we mean the use of...

Companies increasingly shift from hierarchical to team-based organizational structures. Scholars and practitioners alike have emphasized the potential of leadership to foster performance in these settings. However, the causal impact of leadership is difficult to identify, as in agile and...

Many firms use equity-based profit sharing to boost participation in employee stock purchase plans (ESPPs). Using a large panel data set (N=262,824) of a multinational firm, we compare the reactions of former ESPP participants and non-participants to a profit sharing distribution (PSD). We find...

This article examines how employee self-reported entrepreneurial contributions evolved in firms operating in Russia in 1995-2004 and whether changes can be explained by Akerlof's (1982) theory of implicit gift exchange in labour contracts. We find that these contributions were indeed influenced...

Companies increasingly shift from hierarchical to team-based organizational structures. Scholars and practitioners alike have emphasized the potential of leadership to foster performance in these settings. However, the causal impact of leadership is difficult to identify, as in agile and...

Compensation of executives by means of equity has long been seen as a means to tie executives' income to company performance, and thus as a solution to the principal-agent dilemma created by the separation of ownership and management in publicly owned companies. The overwhelming part of such...