Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/232867
Authors: 
Kuhn, Peter J.
Yu, Lizi
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14115
Abstract: 
We study the performance of small retail sales teams facing an incentive scheme that includes both a lump sum bonus and multiple accelerators (kinks where the piece rate jumps upward). Consistent with standard labor supply models, we find that the presence of an attainable bonus or kink on a work-day raises mean sales, and that sales are highly bunched at the bonus; inconsistent with those models we find that teams bunch at the kinks instead of avoiding them. Teams' responses to the kinks are consistent with models in which the kinks are perceived as symbolic rewards, and inconsistent with reference point models where kinks induce loss aversion.
Subjects: 
teams
bonuses
bunching
accelerators
symbolic rewards
loss aversion
JEL: 
J33
M12
Document Type: 
Working Paper

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