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on Contract Theory and Applications |
| By: | Ghazala Azmat; Nagore Iriberri |
| Abstract: | This paper studies the effect of providing relative performance feedback information on individuals' performance and affective response, under both piece-rate and flat-rate incentives. In a laboratory setup, agents perform a real effort task and when receiving feedback, they are asked to rate their happiness, arousal and feeling of dominance. Control subjects learn only their absolute performance, while the treated subjects additionally learn the average performance in the session. Under piece-rate, performance is 17 percent higher when relative performance feedback is provided. Furthermore, although feedback increases the performance independent of the content (i.e., performing above or below the average), the content is determinant for the affective response. When subjects are treated, the inequality in the happiness and the feeling of dominance between those subjects performing above and below the average increases by 8 and 6 percentage points, respectively. Under flat-rate, we do not find any effect on either of the outcome variables. |
| Keywords: | Relative performance, feedback, piece-rate, flat-rate, happiness |
| JEL: | C91 M52 D03 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1116&r=cta |
| By: | Bandiera, Oriana (London School of Economics); Barankay, Iwan (University of Pennsylvania); Rasul, Imran (University College London) |
| Abstract: | Many organizations rely on teamwork, and yet field evidence on the impacts of team-based incentives remains scarce. Compared to individual incentives, team incentives can affect productivity by changing both workers' effort and team composition. We present evidence from a field experiment designed to evaluate the impact of rank incentives and tournaments on the productivity and composition of teams. Strengthening incentives, either through rankings or tournaments, makes workers more likely to form teams with others of similar ability instead of with their friends. Introducing rank incentives however reduces average productivity by 14%, whereas introducing a tournament increases it by 24%. Both effects are heterogeneous: rank incentives only reduce the productivity of teams at the bottom of the productivity distribution, and monetary prize tournaments only increase the productivity of teams at the top. We interpret these results through a theoretical framework that makes precise when the provision of team-based incentives crowds out the productivity enhancing effect of social connections under team production. |
| Keywords: | rank incentives, team-based incentives, teams, tournaments |
| JEL: | D23 J33 M52 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6279&r=cta |
| By: | Andre Barreira da Silva Rocha (Departament of Economics, University of Leicester); Annick Laruelle (a.laruelle@ikerbasque.org); Peio Zuazo (Departamento de Fundamentos del Análisis Económico I UPV/EHU) |
| Abstract: | We generalise and extend the work of Iñarra and Laruelle (2011) by studying two person symmetric evolutionary games with two strategies, a heterogenous population with two possible types of individuals and incomplete information. Comparing such games with their classic homogeneous version vith complete information found in the literature, we show that for the class of anti-coordination games the only evolutionarily stable strategy vanishes. Instead, we find infinite neutrally stable strategies. We also model the evolutionary process using two different replicator dynamics setups, each with a different inheritance rule, and we show that both lead to the same results with respect to stability. |
| Date: | 2012–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:ehu:ikerla:201157&r=cta |