Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/250148 
Year of Publication: 
2021
Series/Report no.: 
Working Papers in Economics and Statistics No. 2021-26
Publisher: 
University of Innsbruck, Research Platform Empirical and Experimental Economics (eeecon), Innsbruck
Abstract: 
A debate among practicing managers is whether to use cooperative or competitive incentives for team production. While competitive incentives may drive individual effort higher, they may also lead to less help and more sabotage; an issue exacerbated when team members' abilities are varied. Using a lab experiment, we examine how increasing competitive incentives affects performance as team composition changes. We find that competitive incentives generally underperform noncompetitive incentives and a larger bonus does not generate enough effort to compensate for a loss in help. Our results help understand better how to balance out individual versus team rewards and how firms could structure teams when employees have heterogeneous abilities.
Subjects: 
contest
help and sabotage
team composition
incentive structure
JEL: 
C92
D01
Document Type: 
Working Paper

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