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Team incentives in public organisations; an experimental study

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Author Info
Jana Vyrastekova
Sander Onderstal
Pierre Koning

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Abstract

Using a simple production game, we investigate whether public firms perform better when they increase the power of their workers’ incentive schemes. In a laboratory experiment, subjects choose between a ‘public firm’ and a ‘private firm’ with team and individual incentives, respectively. When exposed to individual incentives, workers in the public firm increase effort in one parametrisation, but show a decrease in another. One reason for the latter observation is that reciprocators self-select in the public firm, rendering cooperation profitable.

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Publisher Info
Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Discussion Papers with number 60.

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Date of creation: Mar 2006
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Handle: RePEc:cpb:discus:60

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Related research
Keywords: Personnel Economics; Game theory; Experiments; Nonprofit organizations and public enterprise;

Find related papers by JEL classification:
M5 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics
C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
C9 - Mathematical and Quantitative Methods - - Design of Experiments
L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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