Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/26521 
Year of Publication: 
2008
Series/Report no.: 
CESifo Working Paper No. 2476
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Social interaction with colleagues is an important job attribute for many workers. To attract and retain workers, managers therefore need to think about how to create and preserve high-quality co-worker relationships. This paper develops a principal-multi-agent model where agents do not only engage in productive activities, but also in social interaction with their colleagues, which in turn creates co-worker altruism. We study how financial incentives for productive activities can improve or damage the work climate. We show that both team incentives and relative incentives can help to create a good work climate. We discuss some empirical evidence supporting these predictions.
Subjects: 
Social interaction
altruism
incentive contracts
co-worker satisfaction
JEL: 
D86
J41
M50
Document Type: 
Working Paper
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