Work motivation, institutions, and performance

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Work motivation, institutions, and performance

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Simon Gächter
Armin Falk

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Abstract

In this paper we study experimentally four remedies to overcome inefficiencies that arise from the incompleteness of contracts. These remedies are reciprocity, repeated game effects, social embeddedness, and incentive contracts. In our baseline treatment we find that reciprocity is a powerful contract enforcement device. A second experiment establishes that repeated game effects interact with reciprocity in a complementary way, i.e., efficiency is increased compared to our baseline. Adding social approval incentives does not contribute significantly to efficiency. Finally, we show that explicit incentive contracts may have perverse effects in the sense that they "crowd out” reciprocity and therefore reduce efficiency compared to the baseline. In our concluding section we discuss the relation of our findings to the recent literature on "intrinsic motivation”.

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Paper provided by Institute for Empirical Research in Economics - IEW in its series IEW - Working Papers with number iewwp062.

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Handle: RePEc:zur:iewwpx:062

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Find related papers by JEL classification:
D64 - Microeconomics - - Welfare Economics - - - Altruism
J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

This paper has been announced in the following NEP Reports:

NEP-LAB-2000-11-14 (Labour Economics)

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Bruno S. Frey & Marcel Kucher & Alois Stutzer, . "Outcome, Process & Power in Direct Democracy," IEW - Working Papers iewwp025, Institute for Empirical Research in Economics - IEW. [Downloadable!]
Other versions:
- Frey, Bruno S. & Kucher, Marcel & Stutzer, Alois, 1999. "Outcome, Process & Power in Direct Democracy," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
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Other versions:
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Josef Falkinger et al., 2000. "A Simple Mechanism for the Efficient Provision of Public Goods: Experimental Evidence," American Economic Review, American Economic Association, vol. 90(1), pages 247-264, March. [Downloadable!] (restricted)
Other versions:
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Other versions:
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Lalive, Rafael & van Ours, Jan C. & Zweimüller, Josef, 2000. "The Impact of Active Labor Market Programs and Benefit Entitlement Rules on the Duration of Unemployment," IZA Discussion Papers 149, Institute for the Study of Labor (IZA). [Downloadable!]
Other versions:
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Bruno S. Frey & Alois Stutzer, . "Maximising Happiness?," IEW - Working Papers iewwp022, Institute for Empirical Research in Economics - IEW. [Downloadable!]
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Bruno S. Frey & Lorenz Goette, . "Does Pay Motivate Volunteers?," IEW - Working Papers iewwp007, Institute for Empirical Research in Economics - IEW. [Downloadable!]
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Other versions:
- Bruno S. Frey & Alois Stutzer, . "Happiness, Economy and Institutions," IEW - Working Papers iewwp015, Institute for Empirical Research in Economics - IEW. [Downloadable!]
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Other versions:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Dickinson, David & Villeval, Marie-Claire, 2004. "Does Monitoring Decrease Work Effort? The Complementarity Between Agency and Crowding-Out Theories," IZA Discussion Papers 1222, Institute for the Study of Labor (IZA). [Downloadable!]
Other versions:
- David Dickinson & Marie-Claire Villeval, 2004. "Does Monitoring Decrease Work Effort ? The Complementarity Between Agency and Crowding-Out Theorie," Post-Print halshs-00180112_v1, HAL. [Downloadable!]
- David Dickinson & Marie-Claire Villeval, 2004. "Does Monitoring Decrease Work Effort? The Complementarity Between Agency and Crowding-Out Theories," Post-Print halshs-00175010_v1, HAL. [Downloadable!]
- Marie-Claire Villeval & David Dickinson, 2004. "Does Monitoring Decrease Work Effort ? The Complementarity Between Agency and Crowding-Out Theories," Working Papers 0409, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure. [Downloadable!]
- David Dickinson & Marie-Claire Villeval, 2005. "Does Monitoring Decrease Work Effort? The Complementarity Between Agency and Crowding-Out Theories," Working Papers 05-12, Department of Economics, Appalachian State University. [Downloadable!]
- 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. [Downloadable!] (restricted)

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