Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/34184 
Year of Publication: 
2006
Series/Report no.: 
IZA Discussion Papers No. 2423
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
How to design compensation schemes to motivate team members appears to be one of the most challenging problems in the economic analysis of labour provision. We shed light on this issue by experimentally investigating team-based compensations with and without bonuses awarded to the highest contributors in teams. A purely team-based compensation scheme induces agents to voluntarily cooperate while introducing an additional relative reward increases effort and efficiency only when the bonus is substantial. In this case, however, the data suggests that tournament competition crowds out voluntary cooperation within a team.
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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