TY  - GEN
N2  - Within a laboratory experiment we investigate a principal-agent game in which agents may,
first, self-select into a group task (GT) or an individual task (IT) and, second, choose work
effort. In their choices of task and effort the agents have to consider pay contracts for both
tasks as offered by the principal. The rational solution of the game implies that contract
design may not induce agents to select GT and provide positive effort in GT. Furthermore it
predicts equal behavior of agents with different productivities. In contrast, considerations of
trust, reciprocity and cooperation ? the social-emotional model of behavior ? suggest that
contract design can influence the agents? willingness to join groups and provide effort. We
analyze the data by applying a two-step regression model (multinomial logit and tobit) and
find that counter to the rational solution, contract design does influence both, task selection
and effort choice. The principal can increase participation in work groups and can positively
influence group performance. Larger payment increases the share of socially motivated agents
in work groups. The selection effect is larger than the motivation effect.
TI  - Performance pay, group selection and group performance
T3  - ELSE Working Papers
KW  - JEL classification: M5
KW  -  J3
KW  -  C7
KW  -  C9. Principal-agent
KW  -  experiment
KW  -  work group
KW  -  selection
KW  -  motivation
ID  - discovery14442
CY  - London, UK
UR  - http://else.econ.ucl.ac.uk/newweb/papers.php#2007
PB  - ESRC Centre for Economic Learning and Social Evolution
AV  - public
Y1  - 2007/03//
A1  - Konigstein, M.
A1  - Luenser, G.
ER  -