Incentive contracts and peer effects in the workplace
Claveria-Mayol, Marc (Universitat de les Illes Balears)
Milán Solé, Pau (Universitat Autònoma de Barcelona)
Oviedo-Dávila, Nicolás (Universitat Autònoma de Barcelona)

Publicació:	Barcelona : Barcelona School of Economics, 2025
Descripció:	68 pàg.
Resum:	We analyze how firms should design wage contracts when workers collaborate in teams and effort costs depend on colleagues through a peer network. Performancebased compensation generates incentives that cascade through the organization, which firms target to boost profits. We analyze optimal incentive design if firms can-and can't-fully discriminate across workers, and when the production technology is separable or complementary across divisions. When workers' effort is substitutable, the most central workers-those who influence most colleagues directly and indirectly-receive the steepest incentives only when output risk is sufficiently large; otherwise firms prioritize workers that are closer to those they influence. We derive a sufficient network statistic that measures the surplus loss when firms must compensate workers of varying centrality equally. Finally, when production technology exhibits complementarity across teams, stronger incentives are assigned to workers who influence colleagues in small teams that receive little influence from others. We apply our findings to organizational design questions, such as optimal firm structure and workforce investments.
Ajuts:	Agencia Estatal de Investigación ECO2017-83534-P Agencia Estatal de Investigación PID2020-116771GB-I00 Agencia Estatal de Investigación PID2022-140014NB-I00 Agencia Estatal de Investigación CEX2019-000915-S
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Llengua:	Anglès
Col·lecció:	BSE Barcelona School of Economics Working Papers ; 1439
Document:	Working paper ; recerca ; Versió publicada
Matèria:	Moral Hazard ; Networks ; Incentives ; Organizations ; Contracts

Adreça alternativa: https://bse.eu/sites/default/files/working_paper_pdfs/1439.pdf

68 p, 1.3 MB

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