Positive Self-Image and Incentives in Organizations

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Serval ID
serval:BIB_0DDE9451ACF7
Type
Article: article from journal or magazin.
Collection
Publications
Title
Positive Self-Image and Incentives in Organizations
Journal
The Economic Journal
Author(s)
Santos Pinto L.
ISSN
0013-0133
Publication state
Published
Issued date
08/2008
Peer-reviewed
Oui
Volume
118
Number
531
Pages
1315-1332
Language
english
Abstract
This paper investigates the implications of workers' mistaken beliefs about their abilities on incentives in organisations. It shows that if effort is observable, then an agent's mistaken beliefs about his own ability are favourable to the principal. However, when effort is unobservable an agent's mistaken beliefs about his own ability can be either favourable or unfavourable to the principal. The article provides conditions under which an agent's overestimation about his own ability is favourable to the principal when effort is unobservable. The article shows that workers' mistaken beliefs about their co-workers' abilities make interdependent incentive schemes more attractive to firms than individualistic ones.
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Create date
02/10/2008 13:32
Last modification date
20/08/2019 12:34
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