Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86880
Authors: 
Vyrastekova, Jana
Onderstal, Sander
Koning, Pierre
Year of Publication: 
2010
Series/Report no.: 
Tinbergen Institute Discussion Paper 10-074/1
Abstract: 
We examine how self-selection of workers into firms depends on the power of the firms' incentive schemes and how it affects the performance of firms that increase the power of the incentive schemes. In a laboratory experiment, we let subjects choose between (low-powered) team incentives and (high-powered) individual incentives. We observe that subjects exhibiting high trust or reciprocity in the trust game are more likely to choose team incentives. When exposed to individual incentives, workers who chose team incentives perform worse if both the unobservable interdependency between workers and their incentive to cooperate under team incentives are high.
Subjects: 
Incentive scheme
Self-selection
Laboratory experiment
JEL: 
C91
J33
M52
Document Type: 
Working Paper

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