Arbeitspapier

On the Hidden Costs of Incentive Schemes

By enriching a principal-agent model it is shown that the introduction of monetary incentives may reduce an agent's motivation. In a first step, we allow for the possibility that some agents stick to unverifiable agreements. The larger the fraction of reliable agents, the lower powered will then be the optimal incentive scheme and fixed wages become optimal when performance measurement is costly. If social norms matter such that some agents' reliability is influenced by their beliefs on the convictions of others, high powered incentives signal that not sticking to agreements is a widespread behavior and may lead to lower effort levels.

Sprache
Englisch

Erschienen in
Series: Bonn Econ Discussion Papers ; No. 12/2003

Klassifikation
Wirtschaft
Organizational Behavior; Transaction Costs; Property Rights
Compensation Packages; Payment Methods
Personnel Economics: Compensation and Compensation Methods and Their Effects
Thema
Incentives
Intrinsic Motivation
Motivation Crowding-Out
Honesty
Leistungsanreiz
Anreizvertrag
Agency Theory
Motivation
Crowding out
Theorie

Ereignis
Geistige Schöpfung
(wer)
Sliwka, Dirk
Ereignis
Veröffentlichung
(wer)
University of Bonn, Bonn Graduate School of Economics (BGSE)
(wo)
Bonn
(wann)
2003

Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Sliwka, Dirk
  • University of Bonn, Bonn Graduate School of Economics (BGSE)

Entstanden

  • 2003

Ähnliche Objekte (12)