Incentives in Organizations

Robert Gibbons

Journal of Economic Perspectives, 1998, vol. 12, issue 4, 115-132

Abstract: In this paper, the author summarizes four new strands in agency theory that help him think about incentives in real organizations. As a point of departure, The author begins with a quick sketch of the classic agency model. He then discusses static models of objective performance measurement that sharpen Kerr's argument; repeated-game models of subjective performance assessments; incentives for skill development rather than simply for effort; and incentive contracts between versus within organizations. The author concludes by suggesting two avenues for further progress in agency theory: better integration with organizational economics, as launched by Coase (1937) and reinvigorated by Williamson (1975, 1985), and cross-pollination with other fields that study organizations, including industrial relations, organizational sociology, and social psychology.

JEL-codes: D23 L14 (search for similar items in EconPapers)
Date: 1998
Note: DOI: 10.1257/jep.12.4.115
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Citations: View citations in EconPapers (283)

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