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Incentives for Helping on the Job: Theory and Evidence

  • Drago, Robert
  • Garvey, Gerald T
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    Recent advances in incentive theory stress the multidimensional nature of agent effort and specifically cases where workers affect one anothers' performance through 'helping' efforts. This article models helping efforts as determined by the compensation package and task allocation. The model is tested with Australian evidence on reported helping efforts within work groups. The evidence consistently supports the hypotheses that helping efforts are reduced, while individual efforts are increased, when promotion incentives are strong. Piece rates and profit-sharing appear to have little effect on helping efforts, while task variety and helping efforts are positively correlated. Copyright 1998 by University of Chicago Press.

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    File URL: http://dx.doi.org/10.1086/209880
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    Article provided by University of Chicago Press in its journal Journal of Labor Economics.

    Volume (Year): 16 (1998)
    Issue (Month): 1 (January)
    Pages: 1-25

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    Handle: RePEc:ucp:jlabec:v:16:y:1998:i:1:p:1-25
    Contact details of provider: Web page: http://www.journals.uchicago.edu/JOLE/

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    1. Lazear, Edward P, 1989. "Pay Equality and Industrial Politics," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 561-80, June.
    2. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    3. Edward P. Lazear & Sherwin Rosen, 1979. "Rank-Order Tournaments as Optimum Labor Contracts," NBER Working Papers 0401, National Bureau of Economic Research, Inc.
    4. Knoeber, Charles R & Thurman, Walter N, 1994. "Testing the Theory of Tournaments: An Empirical Analysis of Broiler Production," Journal of Labor Economics, University of Chicago Press, vol. 12(2), pages 155-79, April.
    5. Itoh, Hideshi, 1991. "Incentives to Help in Multi-agent Situations," Econometrica, Econometric Society, vol. 59(3), pages 611-36, May.
    6. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
    7. Ramakrishnan, Ram T S & Thakor, Anjan V, 1991. "Cooperation versus Competition in Agency," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(2), pages 248-83, Fall.
    8. Malcomson, James M, 1984. "Work Incentives, Hierarchy, and Internal Labor Markets," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 486-507, June.
    9. Main, Brian G M & O'Reilly, Charles A, III & Wade, James, 1993. "Top Executive Pay: Tournament or Teamwork?," Journal of Labor Economics, University of Chicago Press, vol. 11(4), pages 606-28, October.
    10. Nicholas Wilson & Michael J. Peel, 1991. "The Impact on Absenteeism and Quits of Profit-Sharing and other Forms of Employee Participation," ILR Review, Cornell University, ILR School, vol. 44(3), pages 454-468, April.
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