|Dittrich, Dennis A. V. and Kocher, Martin G. (2011): Monitoring and Pay: An Experiment on Employee Performance under Endogenous Supervision. Discussion Papers in Economics 2011-9|
We present an experimental test of a shirking model where monitoring intensity is endogenous and effort a continuous variable. Wage level, monitoring intensity and consequently the desired enforceable effort level are jointly determined by the maximization problem of the firm. As a result, monitoring and pay should be complements. In our experiment, between and within treatment variation is qualitatively in line with the normative predictions of the model under standard assumptions. Yet, we also find evidence for reciprocal behavior. Our data analysis shows, however, that it does not pay for the employer to solely rely on the reciprocity of employees.
|Item Type:||Paper (Discussion Paper)|
|Keywords:||incentive contracts, supervision, efficiency wages,experiment, incomplete contracts, reciprocity|
Economics > Discussion Papers in Economics
|Subjects:||300 Social sciences > 300 Social sciences, sociology and anthropology|
300 Social sciences > 330 Economics
|JEL Classification:||C91, J31, J41|
|Deposited On:||03. May 2011 18:14|
|Last Modified:||25. May 2012 04:16|
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