Incentive Reversal
Eyal Winter
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| Article Citation |
Winter, Eyal. 2009. "Incentive Reversal." American Economic Journal: Microeconomics, 1(2): 133–47.
DOI:10.1257/mic.1.2.133
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| Abstract |
By incentive reversal we refer to situations in which an increase in
rewards for all agents results in fewer agents exerting effort. We
show that externalities among peers may give rise to such intriguing
situations even when all agents are fully rational. We provide a necessary
and sufficient condition for the organizational technology so
that it will be susceptible to incentive reversal. The condition implies
that some degree of complementarity is enough to allow incentive
reversal. (JEL D23, D82, M54)
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| Authors |
Winter, Eyal (Hebrew U Jerusalem)
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| JEL Classifications |
D23: Organizational Behavior; Transaction Costs; Property Rights
D82: Asymmetric and Private Information
M54: Personnel Economics: Labor Management
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