Team incentives and leadership

Drouvelis, Michalis; Nosenzo, Daniele; Sefton, Martin

Abstract

We study, experimentally, how two alternative incentive mechanisms affect team performance and how a team chooses between alternative mechanisms. We study a group incentive mechanism (team output is shared equally among team members) and a hierarchical mechanism (team output is allocated by a team leader). We find that output is higher when a leader has the power to allocate output, but this mechanism also generates large differences between earnings of leaders and other team members. When team members can choose how much of team output is to be shared equally and how much is to be allocated by a leader they tend to restrict the leader’s power to distributing less than half of the pie.

Citation

Drouvelis, M., Nosenzo, D., & Sefton, M. (in press). Team incentives and leadership. Journal of Economic Psychology, 62, https://doi.org/10.1016/j.joep.2017.07.002

• Journal Article Type: Article
• Acceptance Date: Jul 11, 2017
• Online Publication Date: Jul 13, 2017
• Deposit Date: Jul 14, 2017
• Publicly Available Date: Jan 14, 2019
• Journal: Journal of Economic Psychology
• Print ISSN: 0167-4870
• Electronic ISSN: 0167-4870
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 62
• DOI: https://doi.org/10.1016/j.joep.2017.07.002
• Keywords: Team Production; Leadership; Reward Power; Delegation; Experiment
• Public URL: https://nottingham-repository.worktribe.com/output/872308
• Publisher URL: http://www.sciencedirect.com/science/article/pii/S0167487016304354