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Title:Social norms and optimal incentives in firms PDF Logo
Authors:Huck, Steffen
Kübler, Dorothea
Weibull, Jörgen
Issue Date:2001
Series/Report no.:SSE/EFI Working Paper Series in Economics and Finance 466
Abstract:This paper deals with the interplay between economic incentives and social norms in firms. We outline a simple model of team production and provide preliminary results on linear incentive schemes in the presence of a social norm that may cause multiple equilibria. The effect of the social norm on the optimal bonus rate is discussed, as well as the effectiveness of temporary changes in the bonus rate as a means to move a firm from a bad to a good equilibrium.
Subjects:social norms
incentives
contracts
JEL:D23
Document Type:Working Paper
Appears in Collections:SSE/EFI Working Paper Series in Economics and Finance, EFI - The Economic Research Institute, Stockholm School of Economics

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