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Jana Vyrastekova (Tilburg University). Economics colloquia.

Event details of Team incentives in public organizations: An experimental study
Date 8 September 2005
Time 12:15 -13:15

Using a simple production game, we investigate whether public firms perform better when they increase the power of their worker's 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 treatment, but show a decrease in another. A reason for the latter observation is that subjects with beliefs in reciprocity of others self-select in the public firm in which cooperation is more profitable.