Monitoring and Pay: An Experiment on Employee Performance under Endogenous Supervision

Dittrich, Dennis Alexis Valin und Kocher, Martin G. (26. September 2006): Monitoring and Pay: An Experiment on Employee Performance under Endogenous Supervision. Tinbergen Institute Discussion Paper

Abstract

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 selfishness assumptions. Yet, we also find evidence for reciprocal behavior. The data analysis shows, however, that it does not pay for the employer to rely on the reciprocity of employees.

• Dokumententyp: Paper
• Fakultät: Volkswirtschaft ; Volkswirtschaft > Lehrstühle > Seminar für Experimentelle Wirtschaftsforschung
• Themengebiete: 300 Sozialwissenschaften > 330 Wirtschaft
• JEL Classification: C91, J31, J41
• Sprache: Englisch