Discretion, productivity, and work satisfaction

Björn Bartling, Ernst Fehr and Klaus M. Schmidt

Munich Reprints in Economics from University of Munich, Department of Economics

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.

Date: 2013
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Citations: View citations in EconPapers (12)

Published in Journal of Institutional and Theoretical Economics (JITE) 1 169(2013): pp. 4-22

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Related works:
Journal Article: 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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Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenar:20127

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