IDEAS home Printed from https://ideas.repec.org/p/cns/cnscwp/200404.html
   My bibliography  Save this paper

How to incentive Who? Intra-personal and inter-personal mechanisms

Author

Listed:
  • V. Pelligra

Abstract

The paper focuses on the working of incentives both in parametric and strategic situations. It challenges some of the basic assumptions of the traditional model of economic agent which is usually assumed as self-interested and consequentialist. Psychological researches have stressed the descriptive limitations of that model and pointed out the relevance of other behavioral principles. Intrinsic motivations, reciprocity and trust being the most prominent among them. The paper analyses two different kinds of incentive mechanisms, namely, intra-personal and inter-personal and presents the results of an experiment that emphasize the empirical relevance of the latter. Besides providing a more descriptively adequate picture of interactive agency, such mechanisms have important normative implications that are discussed in the closing section.

Suggested Citation

  • V. Pelligra, 2004. "How to incentive Who? Intra-personal and inter-personal mechanisms," Working Paper CRENoS 200404, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    • Handle: RePEc:cns:cnscwp:200404
    as

    Download full text from publisher

    File URL: https://crenos.unica.it/crenos/node/203
    Download Restriction: no
    File URL: https://crenos.unica.it/crenos/sites/default/files/wp/04-04.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gneezy, Uri & Rustichini, Aldo, 2000. "A Fine is a Price," The Journal of Legal Studies, University of Chicago Press, vol. 29(1), pages 1-17, January.
    2. Fehr, Ernst & Falk, Armin, 2002. "Psychological foundations of incentives," European Economic Review, Elsevier, vol. 46(4-5), pages 687-724, May.
    3. Bruno S. Frey, 1997. "Not Just for the Money," Books, Edward Elgar Publishing, number 1183.
    4. Ernst Fehr & John A. List, 2004. "The Hidden Costs and Returns of Incentives-Trust and Trustworthiness Among CEOs," Journal of the European Economic Association, MIT Press, vol. 2(5), pages 743-771, September.
    5. Nelson, William Jr., 2002. "Equity or intention: it is the thought that counts," Journal of Economic Behavior & Organization, Elsevier, vol. 48(4), pages 423-430, August.
    6. Geanakoplos, John & Pearce, David & Stacchetti, Ennio, 1989. "Psychological games and sequential rationality," Games and Economic Behavior, Elsevier, vol. 1(1), pages 60-79, March.
    7. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
    8. Michael Bacharach & Gerardo A. Guerra & Daniel John Zizzo, 2001. "Is Trust Self-Fulfilling? An Experimental Study," Economics Series Working Papers 76, University of Oxford, Department of Economics.
    9. Herbert A. Simon, 1991. "Organizations and Markets," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 25-44, Spring.
    10. Frey, Bruno S & Oberholzer-Gee, Felix, 1997. "The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out," American Economic Review, American Economic Association, vol. 87(4), pages 746-755, September.
    11. Bruno S. Frey & Iris Bohnet, 1999. "Social Distance and Other-Regarding Behavior in Dictator Games: Comment," American Economic Review, American Economic Association, vol. 89(1), pages 335-339, March.
    12. Sen, Amartya K, 1980. "Description as Choice," Oxford Economic Papers, Oxford University Press, vol. 32(3), pages 353-369, November.
    13. HarryG. Barkma*, 1995. "Do Top Managers Work Harder When They Are Monitored?," Kyklos, Wiley Blackwell, vol. 48(1), pages 19-42, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pelligra, Vittorio, 2006. "Trust, Reciprocity and Institutional Design: Lessons from Behavioural Economics," AICCON Working Papers 37-2006, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    2. Erik O. Kimbrough & Vernon L. Smith & Bart J. Wilson, 2008. "Historical Property Rights, Sociality, and the Emergence of Impersonal Exchange in Long-Distance Trade," American Economic Review, American Economic Association, vol. 98(3), pages 1009-1039, June.
    3. Irlenbusch, Bernd & Sliwka, Dirk, 2005. "Incentives, Decision Frames, and Motivation Crowding Out – An Experimental Investigation," IZA Discussion Papers 1758, Institute of Labor Economics (IZA).
    4. Michael Kosfeld & Armin Falk, 2006. "The Hidden Costs of Control," American Economic Review, American Economic Association, vol. 96(5), pages 1611-1630, December.
    5. Sliwka, Dirk, 2003. "On the Hidden Costs of Incentive Schemes," IZA Discussion Papers 844, Institute of Labor Economics (IZA).
    6. Dan Ariely & Anat Bracha & Stephan Meier, 2009. "Doing Good or Doing Well? Image Motivation and Monetary Incentives in Behaving Prosocially," American Economic Review, American Economic Association, vol. 99(1), pages 544-555, March.
    7. Irlenbusch, Bernd & Ruchala, Gabriele K., 2006. "Relative Rewards within Team-Based Compensation," IZA Discussion Papers 2423, Institute of Labor Economics (IZA).
    8. Xiao, Erte & Houser, Daniel, 2009. "Avoiding the sharp tongue: Anticipated written messages promote fair economic exchange," Journal of Economic Psychology, Elsevier, vol. 30(3), pages 393-404, June.
    9. Margit Osterloh & Bruno S. Frey, "undated". "Corporate Governance for Crooks? The Case for Corporate Virtue," IEW - Working Papers 164, Institute for Empirical Research in Economics - University of Zurich.
    10. Irlenbusch, Bernd & Ruchala, Gabriele K., 2008. "Relative rewards within team-based compensation," Labour Economics, Elsevier, vol. 15(2), pages 141-167, April.
    11. Dickinson, David & Villeval, Marie-Claire, 2008. "Does monitoring decrease work effort?: The complementarity between agency and crowding-out theories," Games and Economic Behavior, Elsevier, vol. 63(1), pages 56-76, May.
    12. Dirk Sliwka, 2007. "Trust as a Signal of a Social Norm and the Hidden Costs of Incentive Schemes," American Economic Review, American Economic Association, vol. 97(3), pages 999-1012, June.
    13. Armin Falk & Michael Kosfeld, "undated". "Distrust - The Hidden Cost of Control," IEW - Working Papers 193, Institute for Empirical Research in Economics - University of Zurich.
    14. Agnès Festré & Pierre Garrouste, 2015. "Theory And Evidence In Psychology And Economics About Motivation Crowding Out: A Possible Convergence?," Journal of Economic Surveys, Wiley Blackwell, vol. 29(2), pages 339-356, April.
    15. Marc Deschamps & Julien Pénin, 2014. "La construction d’une sanction. Le cas des pénalités de retard dans les centres de loisirs de la commune d’Asnières-sur-Seine," Working Papers of BETA 2014-20, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    16. Andreas Fuster & Stephan Meier, 2010. "Another Hidden Cost of Incentives: The Detrimental Effect on Norm Enforcement," Management Science, INFORMS, vol. 56(1), pages 57-70, January.
    17. Andrei Bremzen & Elena Khokhlova & Anton Suvorov & Jeroen van de Ven, 2015. "Bad News: An Experimental Study on the Informational Effects Of Rewards," The Review of Economics and Statistics, MIT Press, vol. 97(1), pages 55-70, March.
    18. Bech, Mickael, 2005. "The economics of non-attendance and the expected effect of charging a fine on non-attendees," Health Policy, Elsevier, vol. 74(2), pages 181-191, October.
    19. Sloof, Randolph & Sonnemans, Joep, 2011. "The interaction between explicit and relational incentives: An experiment," Games and Economic Behavior, Elsevier, vol. 73(2), pages 573-594.
    20. Bruno S. Frey & Margit Osterloh, "undated". "Yes, Managers Should be Paid Like Bureaucrats," IEW - Working Papers 187, Institute for Empirical Research in Economics - University of Zurich.

    More about this item

    Keywords

    trust; crowding-out; institutional design; incentives; reciprocity;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cns:cnscwp:200404. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CRENoS (email available below). General contact details of provider: https://edirc.repec.org/data/crenoit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.