Workplace Incentives and Organizational Learning

Francesco Amodio and Miguel Martinez-Carrasco

No 15498, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper studies learning within organizations when incentives change. We use a simple principal-agent model to show how, in the presence of imperfect information over the shape of the production function, workers' effort choice changes over time as information is disclosed and processed. We also show that changing incentives can trigger this learning process. We test this prediction using personnel data from an egg production plant in Peru. Exploiting a sudden change in the contract parameters, we find that workers learn from each other over the shape of the production function. This adjustment process is costly for the firm.

Keywords: Organizational learning; Workplace incentives; Inputs (search for similar items in EconPapers)
JEL-codes: D22 D24 J24 J33 M11 M52 M54 O12 (search for similar items in EconPapers)
Date: 2020-11
New Economics Papers: this item is included in nep-hrm and nep-ore
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Related works:
Journal Article: Workplace Incentives and Organizational Learning (2023)
Working Paper: Workplace Incentives and Organizational Learning (2020)
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