| Meier, Volker (2004): Setting incentives: Temporary performance premiums versus promotion tournaments. In: Labour, Vol. 18, No. 4: pp. 661-674 |
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Abstract
Two alternative relative compensation schemes are compared with respect to the output that can be generated at a given sum of salaries. While the promotion regime guarantees that any salary increase is permanent, the premium system allows a reduction in the income of an agent to the base salary after one period. It is shown that the optimum promotion tournament system induces a higher total output than the optimum premium system. This result is obtained because a promotion regime allows a distortion in a contest in favor of winners of previous contests.
| Item Type: | Journal article |
|---|---|
| Faculties: | Economics Economics > Chairs > Chair for Public Economics |
| Subjects: | 300 Social sciences > 330 Economics |
| Language: | English |
| ID Code: | 19185 |
| Deposited On: | 15. Apr 2014 08:48 |
| Last Modified: | 04. Nov 2020 13:00 |
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Setting Incentives: Temporary Performance Premiums Versus Promotion Tournaments. (deposited 15. Apr 2014 08:48)
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