Endogenous incentive contracts and efficient coordination

• 成果类型: Article
• 署名作者: Cooper, David J.; Ioannou, Christos A.; Qi, Shi
• 署名单位: State University System of Florida; Florida State University; University of East Anglia; William & Mary
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2018.07.008
• 发表日期: 2018
• 页码: 78-97
• 关键词: Experiment; COORDINATION; incentive contracts; selection

摘要

We examine the effects of endogenous assignment to incentive contracts on worker productivity. Assignment to high performance pay via a market mechanism is roughly twice as effective as imposing the same contract exogenously. This positive effect is largely offset by a negative effect for workers that endogenously choose low performance pay. We decompose the positive effect of endogenous assignment to high performance pay into effects due to selection and strategic anticipation, and find that selection has a greater effect than strategic anticipation. We use a Reverse Sort treatment to show that the effect of selection is sufficiently strong to overcome the direct effect of lower performance pay, yielding coordination at high effort levels in spite of low incentives. (C) 2018 Elsevier Inc. All rights reserved.