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Equal Pay for Unequal Work: Limiting Sabotage in Teams

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  • Debashis Pal

    ()

  • Arup Bose
  • David Sappington

Abstract

We demonstrate the value of equal pay policies in teams, even when team members have distinct abilities and make different contributions to team performance. A commitment to compensate all team members in identical fashion eliminates the incentive that each team member otherwise has to sabotage the activities of teammates in order to induce the team owner to implement a more favorable reward structure. The reduced sabotage benefits the team owner, and can secure Pareto gains under plausible circumstances.

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File URL: http://www.artsci.uc.edu/collegedepts/economics/research/docs/Wppdf/2008-07.pdf
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Bibliographic Info

Paper provided by University of Cincinnati, Department of Economics in its series University of Cincinnati, Economics Working Papers Series with number 2008-07.

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Length: 20 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:cin:ucecwp:2008-07

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Cited by:
  1. Kouroche Vafaï, 2012. "Supervision in Firms," Documents de travail du Centre d'Economie de la Sorbonne 12084, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  2. Kräkel, Matthias & Müller, Daniel, 2012. "Sabotage in teams," Economics Letters, Elsevier, vol. 115(2), pages 289-292.
  3. Kouroche Vafaï, 2012. "Supervision in Firms," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00768900, HAL.
  4. Annala, Christopher N. & Winfree, Jason, 2011. "Salary distribution and team performance in Major League Baseball," Sport Management Review, Elsevier, vol. 14(2), pages 167-175, May.
  5. Subhasish M. Chowdhury & Oliver Gurtler, 2013. "Sabotage in Contests: A Survey," University of East Anglia Applied and Financial Economics Working Paper Series 051, School of Economics, University of East Anglia, Norwich, UK..
  6. repec:hal:journl:halshs-00768900 is not listed on IDEAS
  7. Kouroche Vafaï, 2012. "Optimal Organization," Economics Bulletin, AccessEcon, vol. 32(1), pages 518-527.
  8. J. Atsu Amegashie, 2013. "Sabotage in Contests: An Overview," CESifo Working Paper Series 4422, CESifo Group Munich.

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