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Social Interaction, Co-Worker Altruism, and Incentives

  • Dur, Robert


    (Erasmus University Rotterdam)

  • Sol, Joeri


    (University of Amsterdam)

Social interaction with colleagues is an important job attribute for many workers. To attract and retain workers, managers therefore need to think about how to create and preserve high-quality co-worker relationships. This paper develops a principal-multi-agent model where agents do not only engage in productive activities, but also in social interaction with their colleagues, which in turn creates co-worker altruism. We study how financial incentives for productive activities can improve or damage the work climate. We show that both team incentives and relative incentives can help to create a good work climate.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4532.

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Length: 24 pages
Date of creation: Oct 2009
Date of revision:
Publication status: published in: Games and Economic Behavior, 2010, 69 (2), 293-301
Handle: RePEc:iza:izadps:dp4532
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