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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.
Subjects:Reciprocity
social exchange
incentive contracts
double moral hazard
GSOEP
JEL:D86
J41
M51
M52
M54
M55
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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