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Workplace Incentives and Organizational Learning

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  • Francesco Amodio
  • Miguel A. Martinez-Carrasco

Abstract

This paper studies learning among coworkers when incentives change. We use a simple principal-agent model to show that when workers are not fully informed on the global shape of the production function, (1) their effort choice changes over time as information is disclosed and processed and (2) changing incentives can trigger this learning process. We test this prediction using personnel data from an egg production plant in Peru. Exploiting a sudden change in the contract parameters, we find that workers learn from each other over the shape of the production function. This adjustment process is costly for the firm.

Suggested Citation

  • Francesco Amodio & Miguel A. Martinez-Carrasco, 2023. "Workplace Incentives and Organizational Learning," Journal of Labor Economics, University of Chicago Press, vol. 41(2), pages 453-478.
    • Handle: RePEc:ucp:jlabec:doi:10.1086/719686
    DOI: 10.1086/719686
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    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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