Delegation and Incentives: a tradeoff between exploration and exploitation∗
نویسندگان
چکیده
Standard agency theories predict a positive relationship between incentive pay and delegating authority when workers have private benefits across projects. We consider a different framework where projects have a positive risk-return tradeoff. Weaker incentives encourage risk taking and thus induce higher return projects (exploration) whereas stronger incentives induce effort (exploitation). As a result, delegation and incentives are negatively related when exploration is more valuable than exploitation and are positively related otherwise. Using data from a large cross section of British establishments, we find a negative relationship between delegation and incentives for exploratory occupations and a positive relationship for exploitative occupations.
منابع مشابه
The Relationship Between Delegation and Incentives Across Occupations: Evidence and Theory∗
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