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Treating Equals Unequally - Incentives in Teams, Workers' Motivation and Production Technology

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  • Sebastian Goerg
  • Sebastian Kube
  • Ro'i Zultan

    ()

Abstract

The importance of fair and equal treatment of workers is at the heart of the debate in organizational management. In this regard, we study how reward mechanisms and production technologies affect effort provision in teams. Our experimental results demonstrate that unequal rewards can potentially increase productivity by facilitating coordination, and that the effect strongly interacts with the exact shape of the production function. Taken together, our data highlight the relevance of the production function for organization construction and suggest that equal treatment of equals is neither a necessary nor a sufficient prerequisite for eliciting high performance in teams.

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File URL: http://www.wiwi.uni-bonn.de/bgsepapers/bonedp/bgse17_2007.pdf
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Bibliographic Info

Paper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number bgse17_2007.

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Length: 29
Date of creation: Dec 2007
Date of revision: Jan 2008
Handle: RePEc:bon:bonedp:bgse17_2007

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Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany
Fax: +49 228 73 6884
Web page: http://www.bgse.uni-bonn.de

Related research

Keywords: team incentives; equity; production function; social preferences; laboratory experiment; discriminating mechanism; mechanism design.;

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References

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Citations

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Cited by:
  1. Eva-Maria Steiger & Ro'i Zultan, 2011. "See No Evil: Information Chains and Reciprocity in Teams," Jena Economic Research Papers 2011-040, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  2. Gary Bolton & Peter Werner, 2012. "Are efficiency wages equality wages? Exogenously induced fairness norms in working environments," Working Paper Series in Economics 56, University of Cologne, Department of Economics.
  3. Lewis Evans & Graeme Guthrie & Neil Quigley, 2012. "Contemporary Microeconomic Foundations for the Structure and Management of the Public Sector," Treasury Working Paper Series 12/01, New Zealand Treasury.
  4. Steiger, Eva-Maria & Zultan, Ro'i, 2014. "See no evil: Information chains and reciprocity," Journal of Public Economics, Elsevier, vol. 109(C), pages 1-12.
  5. Abeler, Johannes & Altmann, Steffen & Goerg, Sebastian & Kube, Sebastian & Wibral, Matthias, 2011. "Equity and Efficiency in Multi-Worker Firms: Insights from Experimental Economics," IZA Discussion Papers 5727, Institute for the Study of Labor (IZA).
  6. Esteban F. Klor & Sebastian Kube & Eyal Winter & Ro'i Zultan, 2011. "Can Higher Bonuses Lead to Less E ort? Incentive Reversal in Teams," Levine's Working Paper Archive 786969000000000073, David K. Levine.
  7. Klor, Esteban F. & Kube, Sebastian & Winter, Eyal & Zultan, Ro’i, 2014. "Can higher rewards lead to less effort? Incentive reversal in teams," Journal of Economic Behavior & Organization, Elsevier, vol. 97(C), pages 72-83.
  8. Esteban Klor & Sebastian Kube & Eyal Winter & Ro'i Zultan, 2013. "Can Higher Rewards Lead To Less Effort? Incentive Reversal In Teams," Working Papers 1309, Ben-Gurion University of the Negev, Department of Economics.
  9. Sven Fischer & Eva-Maria Steiger, 2009. "Exploring the Effects of Unequal and Secretive Pay," Jena Economic Research Papers 2009-107, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.

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