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Team incentives and leadership

Drouvelis, Michalis; Nosenzo, Daniele; Sefton, Martin


Michalis Drouvelis

Daniele Nosenzo


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.

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
Keywords Team Production; Leadership; Reward Power; Delegation; Experiment
Public URL
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