Work motivation, institutions, and performance

Simon G�chter and Armin Falk
Authors registered in the RePEc Author Service: Simon Gächter

No 62, IEW - Working Papers from Institute for Empirical Research in Economics - University of Zurich

Abstract: In this paper we study experimentally four remedies to overcome inefficiencies that arise from the incompleteness of contracts. These remedies are reciprocity, repeated game effects, social embeddedness, and incentive contracts. In our baseline treatment we find that reciprocity is a powerful contract enforcement device. A second experiment establishes that repeated game effects interact with reciprocity in a complementary way, i.e., efficiency is increased compared to our baseline. Adding social approval incentives does not contribute significantly to efficiency. Finally, we show that explicit incentive contracts may have perverse effects in the sense that they "crowd out� reciprocity and therefore reduce efficiency compared to the baseline. In our concluding section we discuss the relation of our findings to the recent literature on "intrinsic motivation�.

Keywords: principal agent; incomplete contracts; experiments; work motivation (search for similar items in EconPapers)
JEL-codes: C92 D64 J30 J50 J64 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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