Optimal Incentives for Teams

Yeon-Koo Che and Seung-Weon Yoo

American Economic Review, 2001, vol. 91, issue 3, 525-541

Abstract: Much of the existing theory of incentives describes a static relationship that lasts for just one transaction. This static assumption is not only unrealistic, but the resulting predictions appear to be at odds with many work organizations. The current paper introduces possible long-term interaction among agents, and studies how the design of explicit incentives and work organizations can exploit, and interact with, the implicit incentives generated by the repeated interaction of the agents. The optimal incentive scheme is shown to display observed features of the increasingly popular "teams," such as the use of low-powered, group incentives.

JEL-codes: D23 J33 J41 M54 (search for similar items in EconPapers)
Date: 2001
Note: DOI: 10.1257/aer.91.3.525
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (271)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/aer.91.3.525 (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Optimal incentives for teams (1998)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:91:y:2001:i:3:p:525-541

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert (mpa@aeapubs.org).