Discretion, Productivity, and Work Satisfaction

Björn Bartling, Ernst Fehr and Klaus Schmidt ()

Journal of Institutional and Theoretical Economics (JITE), 2013, vol. 169, issue 1, 4-22

Abstract: In Bartling, Fehr, and Schmidt (2012) we show theoretically and experimentally that it is optimal to grant discretion to workers if (i) discretion increases productivity, (ii) workers can be screened by past performance, (iii) some workers reciprocate high wages with high effort, and (iv) employers pay high wages leaving rents to their workers. In this paper we show experimentally that the productivity increase due to discretion is not only sufficient but also necessary for the optimality of granting discretion to workers. Furthermore, we report representative survey evidence on the effect of discretion on workers' welfare, confirming that workers earn rents.

JEL-codes: J3 M5 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (12)

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Related works:
Working Paper: Discretion, productivity, and work satisfaction (2013)
Working Paper: Discretion, Productivity, and Work Satisfaction (2012)
Working Paper: Discretion, Productivity and Work Satisfaction (2012)
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DOI: 10.1628/093245613X660357

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