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The effect of communication in incentive systems-an experimental study

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  • Christine Harbring

    (Department of Personnel Economics and Human Resource Management, University of Cologne, Herbert-Lewin-Str. 2, D-50931 Köln, Germany)

Abstract

In organizational theory, it is a widely accepted postulate that cooperation among subjects is enforceable. This assumption is essential for the evaluation of two frequently discussed incentive systems: team and tournament compensation. Whereas in team-based pay systems cooperation is highly desired, cooperation in rank-order tournaments-labeled as 'collusion'-is regarded as one of the main drawbacks of relative performance evaluation. In this experimental study, two different communication technologies are introduced into both incentive environments. The results indicate that when only limited communication is permitted subjects tend to cheat on each other in the tournament rather than in the team setting. Interestingly, allowing subjects to exchange emails leads to a similarly stable cooperation in both incentive systems. Copyright © 2006 John Wiley & Sons, Ltd.

Suggested Citation

  • Christine Harbring, 2006. "The effect of communication in incentive systems-an experimental study," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 27(5), pages 333-353.
  • Handle: RePEc:wly:mgtdec:v:27:y:2006:i:5:p:333-353
    DOI: 10.1002/mde.1266
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    File URL: http://hdl.handle.net/10.1002/mde.1266
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    Cited by:

    1. Cason, Timothy N. & Sheremeta, Roman M. & Zhang, Jingjing, 2012. "Communication and efficiency in competitive coordination games," Games and Economic Behavior, Elsevier, vol. 76(1), pages 26-43.
    2. Emmanuel Dechenaux & Dan Kovenock & Roman Sheremeta, 2015. "A survey of experimental research on contests, all-pay auctions and tournaments," Experimental Economics, Springer;Economic Science Association, vol. 18(4), pages 609-669, December.
    3. repec:eee:wdevel:v:103:y:2018:i:c:p:216-225 is not listed on IDEAS
    4. Fu, Qiang & Ke, Changxia & Tan, Fangfang, 2015. "“Success breeds success” or “Pride goes before a fall”?," Games and Economic Behavior, Elsevier, vol. 94(C), pages 57-79.
    5. Harbring, Christine & Irlenbusch, Bernd, 2009. "Sabotage in Tournaments: Evidence from a Laboratory Experiment," IZA Discussion Papers 4205, Institute for the Study of Labor (IZA).
    6. Sutter, Matthias & Strassmair, Christina, 2009. "Communication, cooperation and collusion in team tournaments--An experimental study," Games and Economic Behavior, Elsevier, vol. 66(1), pages 506-525, May.
    7. repec:spr:jeicoo:v:12:y:2017:i:3:d:10.1007_s11403-016-0177-9 is not listed on IDEAS
    8. Christine Harbring & Bernd Irlenbusch, 2011. "Sabotage in Tournaments: Evidence from a Laboratory Experiment," Management Science, INFORMS, vol. 57(4), pages 611-627, April.
    9. Kelly, Khim & Presslee, Adam, 2017. "Tournament group identity and performance: The moderating effect of winner proportion," Accounting, Organizations and Society, Elsevier, vol. 56(C), pages 21-34.
    10. Eisenkopf, Gerald, 2016. "Communication and Conflict Management," Annual Conference 2016 (Augsburg): Demographic Change 145634, Verein für Socialpolitik / German Economic Association.
    11. Gerald Eisenkopf, 2015. "Communication and conflict management," Working Paper Series of the Department of Economics, University of Konstanz 2015-21, Department of Economics, University of Konstanz.

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