Incentives in Organizations

Journal of Economic Perspectives, Vol. 12, No. 4, Fall 1998

Posted: 22 Dec 1998

See all articles by Robert S. Gibbons

Robert S. Gibbons

Massachusetts Institute of Technology - Sloan School and Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Abstract

In this paper I summarize four new strands in agency theory that help me think about incentives in real organizations. As a point of departure, I begin with a quick sketch of the classic agency model. I then discuss static models of objective performance measurement in which firms get what they pay for; repeated-game models of subjective performance assessments; incentives for skill development rather than simply for effort; and incentive contracts between versus within organizations. I conclude by suggesting two avenues for further progress in agency theory: better integration with organizational economics, as launched by Coase and reinvigorated by Williamson, and cross-pollination with other fields that study organizations, including industrial relations, organizational sociology, and social psychology.

JEL Classification: J33, J41

Suggested Citation

Gibbons, Robert S., Incentives in Organizations. Journal of Economic Perspectives, Vol. 12, No. 4, Fall 1998. Available at SSRN: https://ssrn.com/abstract=122295

Robert S. Gibbons (Contact Author)

Massachusetts Institute of Technology - Sloan School and Department of Economics ( email )

E52-432
MIT
Cambridge, MA 02142
United States
617-253-0283 (Phone)
617-258-6855 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Register to save articles to
your library

Register

Paper statistics

Abstract Views
2,123
PlumX Metrics