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Treating Equals Unequally: Incentives in Teams, Workers' Motivation and Production TechnologySebastian J. GoergFlorida State University - Department of Economics; Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods Sebastian KubeMax Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods; University of Bonn; Institute for the Study of Labor (IZA) Ro'i ZultanUniversity College London IZA Discussion Paper No. 3959 Abstract: The importance of fair and equal treatment of workers is at the heart of the debate in organizational management. In this regard, we study how reward mechanisms and production technologies affect effort provision in teams. Our experimental results demonstrate that unequal rewards can potentially increase productivity by facilitating coordination, and that the effect strongly interacts with the exact shape of the production function. Taken together, our data highlight the relevance of the production function for organization construction and suggest that equal treatment of equals is neither a necessary nor a sufficient prerequisite for eliciting high performance in teams.
Number of Pages in PDF File: 34 Keywords: team incentives, equity, production function, social preferences, laboratory experiment, discriminating mechanism, mechanism desig JEL Classification: C92, D23, D63, J31, J33, J41, M12, M52 working papers seriesDate posted: February 2, 2009Suggested CitationContact Information
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