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Productivity Under Group Incentives: An Experimental Study

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  • Nalbantian, Haig
  • Schotter, Andrew

Abstract

This paper presents an experimental examination of a variety of group incentive programs. The authors investigate simple revenue sharing and more sophisticated, target-based systems such as profit sharing or productivity gainsharing, as well as tournament-based and monitoring schemes. Their results can be characterized by three facts: (1) history matters-how a group performs in one incentive scheme depends on its history together under the scheme that preceded it; (2) relative performance schemes outperform target-based schemes; and (3) monitoring can elicit high effort from workers, but the probability of monitoring must be high and, therefore, costly. Copyright 1997 by American Economic Association.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Nalbantian, Haig & Schotter, Andrew, 1994. "Productivity Under Group Incentives: An Experimental Study," Working Papers 94-04, C.V. Starr Center for Applied Economics, New York University.
  • Handle: RePEc:cvs:starer:94-04
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