(Thursday, 24th May 2018)
Title : Social Preferences and Incentives in Organizations
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Individual employment relationships are typically embedded in the larger framework of organizations such as firms, thus in a social context where mutual comparisons may play a role. Empirical evidence suggests that workers not only care about their absolute but also their relative economic position compared to co-workers or peers. In the last decades, a large body of literature has evolved that is concerned with social (or other-regarding) preferences in general and in regard to their effects on economic performance, wellbeing, and the motivation of workers. In the workshop, we will discuss selected theoretical approaches to model incentive provision for other-regarding actors in the context of organizations. We will consider different incentive schemes such as individual, joint, and relative performance pay both in one-shot and repeated settings. This allows to reconsider optimal incentive schemes in organizations and sheds light on observed features of real-life incentive schemes.