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Title:Reciprocity and incentive pay in the workplace PDF Logo
Authors:Dur, Robert
Non, Arjan
Roelfsema, Hein
Issue Date:2010
Series/Report no.:IZA Discussion Papers 4782
Abstract:We study optimal incentive contracts for workers who are reciprocal to management attention. When neither worker's effort nor manager's attention can be contracted, a double moral-hazard problem arises, implying that reciprocal workers should be given weak financial incentives. In a multiple-agent setting, this problem can be resolved using promotion incentives. We empirically examine these predictions using data from the German Socio-Economic Panel. We find that workers who are more reciprocal are significantly more likely to receive promotion incentives, while there is no such relation for individual bonus pay.
social exchange
incentive contracts
double moral hazard
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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