Stories at Work

Robert Akerlof, Niko Matouschek and Luis Rayo

AEA Papers and Proceedings, 2020, vol. 110, 199-204

Abstract: Organizational stories are commonplace and a crucial force shaping employee behavior. We show how an organization's choice of story can be formally incorporated into its design problem. In our simple model, the organization optimally becomes either "purpose driven," which involves pairing flat money incentives with a story that emphasizes the importance of generating output (e.g., saving lives, putting a person on the moon), or "incentive driven," which involves pairing steep money incentives with a narrower story that emphasizes the importance of maintaining ethical standards (e.g., maintaining quality, helping peers). We illustrate the applicability of these results using a variety of examples.

JEL-codes: D23 L15 L21 M14 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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DOI: 10.1257/pandp.20201093

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