Productivity Improvements in Public Organisations
AbstractIn this article we examine the scope a principal in a public organisation has for motivating agents for productivity improvements where standard stick and carrot incentives cannot be used. The principal's only incentive device is a reallocation of budgets and tasks across agents depending on the extent of productivity improvements revealed by each agent. We first show that as long as agents do not collude, the principal can use rotation and tournament schemes to eliminate all slack in the organisation. Second, to break collusion between agents, the principal must use discriminatory tournament schemes. In some cases, however, there is no incentive scheme that can overcome collusion. Copyright 2005 Royal Economic Society.
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Bibliographic InfoArticle provided by Royal Economic Society in its journal The Economic Journal.
Volume (Year): 115 (2005)
Issue (Month): 505 (07)
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Other versions of this item:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs
- M12 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Personnel Management; Executives; Executive Compensation
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- Rainer Bartel, 2007. "Der öffentliche Sektor in der Defensive," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 33(2), pages 199-230.
- Volker Hahn, 2010.
"Sequential Aggregation of Verifiable Information,"
CER-ETH Economics working paper series
10/136, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
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