Incentive Reversal

Eyal Winter ()

American Economic Journal: Microeconomics, 2009, vol. 1, issue 2, 133-47

Abstract: By incentive reversal we refer to situations in which an increase in rewards for all agents results in fewer agents exerting effort. We show that externalities among peers may give rise to such intriguing situations even when all agents are fully rational. We provide a necessary and sufficient condition for the organizational technology so that it will be susceptible to incentive reversal. The condition implies that some degree of complementarity is enough to allow incentive reversal. (JEL D23, D82, M54)

JEL-codes: D23 D82 M54 (search for similar items in EconPapers)
Date: 2009
Note: DOI: 10.1257/mic.1.2.133
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Citations: View citations in EconPapers (19)

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Related works:
Working Paper: Incentive Reversal (2007)
Working Paper: Incentive Reversal (2007)
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