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Team incentives in public organisations; an experimental study

  • Pierre Koning

    ()

  • J. Vyrastekova
  • S. Onderstal

Using a simple production game, we investigate whether public firms perform better when they increase the power of their workers’ incentive schemes. In a laboratory experiment, subjects choose between a ‘public firm’ and a ‘private firm’ with team and individual incentives, respectively. When exposed to individual incentives, workers in the public firm increase effort in one parametrisation, but show a decrease in another. One reason for the latter observation is that reciprocators self-select in the public firm, rendering cooperation profitable.

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Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Discussion Paper with number 60.

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Date of creation: Mar 2006
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Handle: RePEc:cpb:discus:60
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