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Does Team-Based Compensation Give Rise to Problems When Agents Vary in Their Ability?

Claude Meidinger (), Jean-Louis Rullière () and Marie Claire Villeval ()

Experimental Economics, 2003, vol. 6, issue 3, 253-272

Abstract: This paper reports the results of an experiment on how team heterogeneity in terms of productivity influences both the revenue sharing proposed by the principal to the team and the employees' performance. Experimental evidence shows that when the team is heterogeneous, the principal does not try to motivate the agents through her sharing offer. Regardless of the level of team-based compensation, a large amount of free riding occurs since each agent is mainly influenced by his teammate's behavior. In contrast, when the team is homogeneous, agents are better able to cooperate, reciprocating the principal's offer. Copyright Kluwer Academic Publishers 2003

Keywords: experiments; free riding; compensation; peer pressure; teamwork (search for similar items in EconPapers)
Date: 2003
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Working Paper: Does Team-Based Compensation Give Rise to Problems when Agents Vary in their Ability? (2003)
Working Paper: Does Team-Based Compensation Give Rise to Problems When Agents Vary in Their Ability? (2003)
Working Paper: Does Team-Based Compensation Give Rise to Problems when Agents Vary in their Ability ? (2001) Downloads
Working Paper: Does Team-Based Compensation Give Rise to Problems when Agents Vary in their Ability? (2001)
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