Profit Sharing and Peer Reporting

Jeffrey Carpenter, Andrea Robbett and Prottoy Akbar

Management Science, 2018, vol. 64, issue 9, 4261-4276

Abstract: Despite the “1/ N problem” associated with profit sharing, the empirical literature finds that sharing profits with workers has a positive impact on work team and firm performance. We examine one possible resolution to this puzzle by observing that, although the incentive to work harder under profit sharing is weak, it might be sufficient to motivate workers to report each other for shirking, especially if the workers are reciprocally minded. Our model provides the rationale for this conjecture, and we discuss the results of an experiment finding that workers who share in firm profits are more willing to provide accurate information about their peers to management and that profit sharing is most effective when peer reporting is possible.

Keywords: team production; profit sharing; peer reporting; reciprocity; experiment (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
https://doi.org/10.1287/mnsc.2017.2831 (application/pdf)

Related works:
Working Paper: Profit Sharing and Peer Reporting (2016)
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:inm:ormnsc:v:64:y:2018:i:9:p:4261-4276

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().