On the Hidden Costs of Incentive Schemes

dc.creator	Sliwka, Dirk
dc.date	2003
dc.date.accessioned	2013-10-16T07:08:36Z
dc.date.available	2013-10-16T07:08:36Z
dc.date.issued	2013-10-16
dc.identifier	http://hdl.handle.net/10419/20087
dc.identifier	ppn:368837440
dc.identifier.uri	http://koha.mediu.edu.my:8181/xmlui/handle/10419/20087
dc.description	By enriching a principal-agent model it is shown that the introduction of monetary incentives may reduce an agent?s motivation. In a first step, we allow for the possibility that some agents stick to unverifiable agreements. The larger the fraction of reliable agents, the lower powered will then be the optimal incentive scheme and fixed wages become optimal when performance measurement is costly. If social norms matter such that some agents? reliability is influenced by their beliefs on the convictions of others, high powered incentives signal that not sticking to agreements is a widespread behavior and may lead to lower effort levels.
dc.language	eng
dc.publisher
dc.relation	IZA Discussion paper series 844
dc.rights	http://www.econstor.eu/dspace/Nutzungsbedingungen
dc.subject	J33
dc.subject	M52
dc.subject	D23
dc.subject	ddc:330
dc.subject	incentives
dc.subject	intrinsic motivation
dc.subject	motivation crowding-out
dc.subject	honesty
dc.subject	Leistungsanreiz
dc.subject	Anreizvertrag
dc.subject	Theorie
dc.title	On the Hidden Costs of Incentive Schemes
dc.type	doc-type:workingPaper

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