Although relative performance schemes are pervasive in organizations reliable empirical data on induced sabotage behavior is almost non-existent. We study sabotage in tournaments in a controlled laboratory experiment and are able to confirm one of the key insights from theory: effort and...

This paper explores the consequences of sabotage for the design of incentive contracts. The possibility of sabotage gives rise to a dynamic concern, similar to the Ratchet effect, which distorts the agents' incentives. We first show that the mere possibility of sabotage may make it impossible to...

Arguably the fundamental problem faced by employers is how to elicit effort from employees. Most models suggest that employers meet this challenge by monitoring employees carefully to prevent shirking. But there is another option that relies on heterogeneity across employees, and that is to...

This paper attempts to test the morale theory of nominal wage rigidity by identifying the causal elect of pay cuts on workers' income satisfaction and work morale. This paper uses the current deflationary recession in Japan to estimate this causal elect. Our original survey of Japanese firms and...

Civil servants have a bad reputation of being lazy. However, citizens' personal experiences with civil servants appear to be significantly better. We develop a model of an economy in which workers differ in laziness and in public service motivation, and characterise optimal incentive contracts...

Self-determination theory posits that individuals are motivated at work when their inherent psychological needs for competence, autonomy, and relatedness are satisfied. Drawing on this theory, this paper presents a new conceptual model explaining how work meaningfulness influences effort at...

Self-determination theory posits that individuals are motivated at work when their inherent psychological needs for competence, autonomy, and relatedness are satisfied. Drawing on this theory, this paper presents a new conceptual model explaining how work meaningfulness influences effort at...