Inequity aversion and team incentives

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70 Citas (Scopus)

Resumen

We study optimal contracts in a simple model where employees are averse to inequity, as modeled by Fehr and Schmidt (1999). A "selfish" employer can profitably exploit envy or guilt by offering contracts which create inequity off-equilibrium, i.e., when employees do not meet his demands. Such contracts resemble team and relative performance contracts. We derive conditions for inequity aversion to be in itself a reason to form work teams of distributionally concerned employees, even in situations in which effort is contractible.

Idioma originalInglés
Páginas (desde-hasta)297-320
Número de páginas24
PublicaciónScandinavian Journal of Economics
Volumen110
N.º2
DOI
EstadoPublicada - jun 2008
Publicado de forma externa

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