Cooperation and Competition in Organizations: A Dynamic Perspective.
In static principal-agent relationships, cooperation and competition among agents both yield higher welfare than independent compensation - both modes of job design improve the tradeoff between risk and explicit incentives. In dynamic settings, welfare is also affected by implicit incentives, in particular, the ratchet effect. I characterize the effects of job design decisions on implicit incentives, showing that they differ in nature from explicit incentive effects and may be the dominant on...Expand abstract
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