Social norms and optimal incentives in firms

Steffen Huck, Dorothea Kübler and Jörgen Weibull

No 466, SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract: This paper deals with the interplay between economic incentives and social norms in firms. We outline a simple model of team production and provide preliminary results on linear incentive schemes in the presence of a social norm that may cause multiple equilibria. The effect of the social norm on the optimal bonus rate is discussed, as well as the effectiveness of temporary changes in the bonus rate as a means to move a firm from a bad to a good equilibrium.

Keywords: social norms; incentives; contracts (search for similar items in EconPapers)
JEL-codes: D23 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2001-10-16
New Economics Papers: this item is included in nep-evo, nep-mfd, nep-mic and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

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Related works:
Working Paper: Social norms and optimal incentives in firms (2002)
Working Paper: Social Norms and Optimal Incentives in Firms (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:hastef:0466

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