Collective versus Relative Incentives: the Agency Perspective
نویسندگان
چکیده
What is the best way of providing incentives to a team of agents? Agency theory has given a number of answers in the past three decades on the choice between collective and relative incentive provision. We present a broad overview of this rich literature through a simple model. While the early contributions emphasize the role of performance comparison and competition in motivating agents, more recent research highlights on the contrary the value of organizing cooperation and accounts for a variety of peer-effects. We present some empirical and experimental findings when available, and point out some directions for future research. JEL classification: D20, D86, J33, L23, M12, M50.
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