Discretion, Productivity, and Work Satisfaction
AbstractIn Bartling, Fehr, and Schmidt (2012) we show theoretically and experimentally that it is optimal to grant discretion to workers if (i) discretion increases productivity, (ii) workers can be screened by past performance, (iii) some workers reciprocate high wages with high effort, and (iv) employers pay high wages leaving rents to their workers. In this paper we show experimentally that the productivity increase due to discretion is not only sufficient but also necessary for the optimality of granting discretion to workers. Furthermore, we report representative survey evidence on the effect of discretion on workers' welfare, confirming that workers earn rents.
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Bibliographic InfoArticle provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.
Volume (Year): 169 (2013)
Issue (Month): 1 (March)
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Other versions of this item:
- Bartling, Björn & Fehr, Ernst & Schmidt, Klaus M., 2012. "Discretion, Productivity, and Work Satisfaction," Discussion Papers in Economics 14193, University of Munich, Department of Economics.
- Bartling, Björn & Fehr, Ernst & Schmidt, Klaus M., 2012. "Discretion, Productivity and Work Satisfaction," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 383, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- M5 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics
- J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
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- Morris M. Kleiner & Richard B. Freeman, 2000. "Who Benefits Most from Employee Involvement: Firms or Workers?," American Economic Review, American Economic Association, vol. 90(2), pages 219-223, May.
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