Cooperation versus Competition between Agents in Relational Contracts

Ola Kvaløy and Trond E. Olsen

Journal of Institutional and Theoretical Economics (JITE), 2023, vol. 179, issue 3-4, 616-638

Abstract: How should firms provide incentives to a group of workers when performance measures are unverifiable? We provided some answers to this question in our paper "Team Incentives in Relational Employment Contracts" in 2006. Here we reflect upon the contribution of that paper and provide a further analysis of this research question.We propose a more applied theoretical framework and explore stochastic properties of performance variables, including correlations that make one agent's performance informative about another agent's effort. In this framework cooperative incentives tend to be preferable when performances are negatively correlated, while competitive incentives tend to prevail under positive correlation.

Keywords: relational contracts; team incentives; cooperation; competition; relationalcontracts; teamincentives (search for similar items in EconPapers)
JEL-codes: D86 J33 L23 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.mohrsiebeck.com/en/article/cooperation ... 101628jite-2023-0045
Fulltext access is included for subscribers to the printed version.

Related works:
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:mhr:jinste:urn:doi:10.1628/jite-2023-0045

Ordering information: This journal article can be ordered from
Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany

DOI: 10.1628/jite-2023-0045

Access Statistics for this article

Journal of Institutional and Theoretical Economics (JITE) is currently edited by Gerd Mühlheußer and Bayer, Ralph-C

More articles in Journal of Institutional and Theoretical Economics (JITE) from Mohr Siebeck, Tübingen
Bibliographic data for series maintained by Thomas Wolpert ().