"I take care of my own" : a field study on how leadership handles conflict between individual and collective incentives

Gauriot, Romain & Page, Lionel (2015) "I take care of my own" : a field study on how leadership handles conflict between individual and collective incentives. American Economic Review P&P, 105(5), pp. 414-419.

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From the early literature on the role of firm managers (Alchian and Demsetz 1972) to the industrial organisation on contracts and mechanism design (Laont and Martimort 2009), economists have given a lot of attention to find solutions to the imperfect alignment between individuals' incentives and an organisation's collective goals (Prendergast 1999). In that literature a key role of managers is to monitor individuals to reward behaviour aligned with the collective goals and reduce sub- optimal behaviour, such as shirking. How- ever, another strand of literature, since Akerlof (1982), has put forward a vision of reciprocal behaviour between an organisation's leadership and its members: gifts (high wages, recognition) from the organisation are reciprocated by high effort from the members of the organisation. By rewarding individual members (rather than strictly monitoring them), organisations may benefit from greater effort and cohesion. Experimental research in organizational economics has provided mixed results suggesting that agents do react to personal incentives but also that reciprocal behaviour can play a substantial role (Camerer and Weber 2012).

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ID Code: 81919
Item Type: Journal Article
Refereed: Yes
Additional Information: The paper is published as an article in the special issue of the American Economic Review featuring the proceedings of the annual American Economic Association conference.
ISSN: 0002-8282
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Economics & Finance
Copyright Owner: Copyright 2015 American Economic Association
Deposited On: 19 Feb 2015 04:06
Last Modified: 23 Jun 2015 04:56

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