Incentive systems in a real effort experiment

In the reported experiment different payment schemes are examined on their incentive effects. Payments based on individual, team and relative performance are compared. Subjects conducted computerized tasks that required substantial effort. The results show that individual and team payment induced th...

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Bibliographic Details
Published in:European economic review 2001-02, Vol.45 (2), p.187-214
Main Authors: van Dijk, Frans, Sonnemans, Joep, van Winden, Frans
Format: Article
Language:English
Subjects:
Cooperation
Earnings
Economic incentives
Economic models
Economic theory
Experiment
Experiments
Hypotheses
Mathematical economics
Pay-off
Payment schemes
Payments
Productivity incentives
Statistics
Studies
Teamwork
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Summary:In the reported experiment different payment schemes are examined on their incentive effects. Payments based on individual, team and relative performance are compared. Subjects conducted computerized tasks that required substantial effort. The results show that individual and team payment induced the same effort levels. In team production free-riding occurred, but it was compensated by many subjects providing more effort than in case of individual pay. Effort was higher, but more variable in tournaments, while in case of varying abilities workers with relatively low ability worked very hard and drove up effort of the others. Finally, attitudes towards work and other workers differed strongly between conditions.
ISSN:0014-2921
1873-572X
DOI:10.1016/S0014-2921(00)00056-8