Dynamic Incentive Effects of Heterogeneity in Multi-Stage Promotion Contests

Arbeitspapier

This paper shows that the incentive effects of heterogeneity may be positive rather than negative in dynamic contests with multiple stages. In particular, the well-studied adverse effects of heterogeneity in static interactions are compensated by positive continuation-value and selection effects. Due to these positive dynamic incentive effects of heterogeneity that increase the incentives of relatively more able workers, heterogeneity is unlikely to be as detrimental as commonly perceived for incentives in organizations with multiple hierarchy levels. Heterogeneity of the workforce may even be optimal from the perspective of a firm that provides incentives using a multi-stage promotion contest.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 8368

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Personnel Economics: Compensation and Compensation Methods and Their Effects ; Compensation Packages; Payment Methods
• Thema: incentive provision ; multiple-stages ; promotion contest ; heterogeneity

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Stracke, Rudi ; Sunde, Uwe
• Ereignis: Veröffentlichung
• (wer): Institute for the Study of Labor (IZA)
• (wo): Bonn
• (wann): 2014

Weitere Informationen

• Handle: http://hdl.handle.net/10419/101848
• Letzte Aktualisierung: 10.03.2025, 11:45 MEZ